March 09, 2018 by Jessica Hayes
What is an Unconditional Approval?
An unconditional approval also knows as UA is granted once an application is fully assessed and passes all the credit criteria. It is granted after it has passed the first two stages, pre-approval and/or conditional approval. An unconditional approval is the last step of the application process before clients actually get into a contract with the lender for their mortgage. An unconditional approval is a formal (generally written) advise from the lender that they are agreeing to lend money to our client. It also means that all the supporting documents provided by our client met their expectation and the valuation of the security was also acceptable.
When do you get Uncondiational Approval?
A UA is granted once the banks have met their standard for supporting documents and have conducted a valuation of the acceptable security and are happy with the amount. It is the last approval step for the customers before they go and sign their home loan contracts. The clients get notified when this happens. The other people who are notified are client’s solicitors and the agent they are purchasing the property from.
What is the cost to get Unconditional Approval?
Again, as per the previous blogs and radio communication, there is no costs to the client to get a UA. However once they have decided that they are going to proceed with the home loan application, they will have to then pay application fee to the lender. This fee will vary depending on the lender.
How long does a Unconditional Approval last?
Since UA is the last step of the application and generally at this stage the clients are sure that they want the loan, it doesn’t take very long for the application to settle. (90 days longest and 30 days shortest). However, if it is an extended settlement and it has been more than 90 days since the UA was granted, the banks can ask for updated financial documents to make sure that there has not been a substantial change in the clients financial position.
What next?
After the bank has granted unconditional approval they will then issue home loan documents also known as home loan contracts. These documents outline exactly how much the bank will lend you and what your repayments will be. Your Broker will go through the loan documents with you answer any questions you may have. It is important that you understand the home loan documents, so you know what you are agreeing to.
If you would like more information you can contact our office on 03 5331 3632
