
What is a home loan approval process flowchart for?
If you aspire to join the two-thirds of Australians who are already homeowners, then like most of them, you will probably need a home loan.
I have produced this home loan approval process flowchart from my 15 years experience as a mortgage broker. It takes home buyers through seven key steps of a home loan approval process.
When it comes to the home loan approval process there are so many questions from potential borrowers and home buyers.
- When should I start the home loan approval process?
- Do I need preapproval?
- When do I need a conveyancer?
- What is conditional approval?
- Do I need to attend settlement?
This home loan approval process flowchart provides some clarity for potential home buyers:
- Stages of the home loan approval process
- Timeframes for each stage (where possible to estimate)
- When different professionals have a role in the home loan approval process
Naturally, there will be variations to the home loan approval process as everyone’s situation can differ.
If you only remember one thing from this home loan approval process flowchart then remember this—If you want to buy a home you can start the home loan process now.
Stage 1 – Start something
Timeframe – As soon as you know you want to buy a home
Start something—ready or not.
If you like the idea of owning a home but think you are not ready for a home loan application, it is probably a perfect time to start your home loan approval process.
Meeting with a mortgage broker or lender can get a home buyer moving in the right direction.
If you do not want a meeting just yet, but would like to see where you stand on some key areas of the home loan approval process—consider this 30 minute home loan boot camp.
Starting the home loan approval process today does not mean you need to buy a home tomorrow. It means you can start taking an active approach to the home buying process and be ready when it suits your circumstances.
While there is plenty of publicly available information designed to educate you around the home buying process, this step entails you getting advice specific to your circumstances—that is why there are mortgage brokers.
Read more about starting the home loan approval process….
Stage 2 – Home loan ready
Once clear on the home loan approval process, then based on your situation you are either ready, or need to get ready.
Stay Ready
If you are ready, then stay ready. Keep your mortgage broker closely updated with anything you are considering that may affect a home loan application like a job change or taking out any form of lending—like a personal loan.
Get Ready
Preparing for a home loan can take days to years—I have seen everything in between. Your mortgage broker or lender will let you know what you need to get ready to apply for a home loan.
If you want to get a head start and understand your financial position better, then you could spend 30 minutes getting an understanding of the key elements of what goes into a home loan application with this free HOME LOAN BOOT CAMP – including a home loan documents checklist.
Skip to more about getting home loan ready….
Stage 3 – Pre approval home loan
Timeframe – Pre approval assessment typically takes about two weeks
A pre approval home loan is an optional step where you work with your lender or mortgage broker to have your eligibility for a home loan assessed by a lender before your find a property. A successful application for preapproval can put you in a strong position for buying a home.
Skip to more on the pre approval home loan….
Engage a conveyancer
It is a clever idea to engage with a conveyancer prior offering on a priority. They can review a contract of sale, offer advice around your individual circumstances plus suggest purchase conditions to consider for the property type you are buying.
More information about engaging a conveyancer….
Stage 4 – Buy your home
At its core, every home loan needs a property that acts as the security for the loan. This home loan approval process flowchart deals with buying a house as the central part of the loan process.
How you will end up getting to the point of having an offer accepted on a property is anyone’s guess. Examples of how buyers find their property can be:
- Advertised property through a real estate agent
- Direct from your landlord
- From a family member
- At auction
- Buy off-plan
- Buy land
More information about buying your home….
Stage 5 – Apply for a home loan
Timeframe – typically about 1-3 weeks to approval
It can be a journey getting here, but the everything about the home loan approval process culminates here—when you apply for a home loan.
Once you have an offer to purchase a property accepted you can apply for a home loan. This home loan application is usually a request for unconditional approval. One key difference between unconditional approval and pre approval is that you are now offering a property to a lender to use as security for your home loan.
Read more about applying for a home loan….
Stage 6 – Unconditional approval
Unconditional finance approval is when a lender agrees to provide you the home loan as requested in the application. Given it is often a major condition of a purchase agreement, unconditional approval can set the wheels in motion for other parts of the home loan approval process.
Skip to find more on unconditional approval….
Stage 7 – Settlement
Timeframe – typically 2-4 weeks after unconditional approval
Congratulations!
Settlement day is the culmination the home loan approval process flowchart for home buyers.
At settlement:
- Seller gets their funds and hands over a clear title for your bank to use for the home loan.
- Buyers get their home and the home loan (if applicable) that comes with it.
More information about settlement….
Start something – explained
There are big and small financial decisions we make all the time—think buy now pay later and personal loan offers—that can impact your chances of home loan approval. By starting the home loan approval process now, you can make financial decisions that maintain or potentially improve your future eligibility for a home loan.
The home loan industry is ready and willing to engage with borrowers early in their home buying journey. Even before you think you are ready to buy. The home loan approval process flowchart is designed to cover most steps for someone looking to buy a home using a home loan.
If you are not ready to buy today, then you might be wondering what value can you get from a mortgage broker so early in the home loan approval process? Mortgage brokers are happy to assist their clients from the very early stages of the home loan process. Client education is a large part of any home loan approval process. It can make applying for as home loan a smoother and less uncertain (could substitute ‘emotional’ here) experience.
How you start your home loan approval process begins with you—what works for you?
Do you need to meet face to face or are you happy to deal with someone (or even a chatbot) online?
Do you want a relationship with someone who can help you in your home loan journey long after the initial property purchase has settled?
You would typically meet with a meet with a mortgage broker or approach a lender directly to begin the home loan approval process. This is an ideal time to ask questions.
Mortgage broker vs bank
Should you use a mortgage broker or approach the lender directly?
A mortgage broker’s role is to find a home loan suited to your circumstances. In addition to this they are legally compelled to act in your best interests.
They need to present you with a credit proposal that considers your needs, goals and objectives.
Mortgage brokers help compose and shape the home loan application for the chosen lender and assist you in applying for the home loan.
Banks differ to mortgage brokers in that they usually only offer a suite of their own home loan products. That said, they can still offer good borrowing options for many buyers.
What to expect from your initial home loan meeting
I find these meetings are typically held in person, with a trend towards online meeting formats.
It starts with identifying your goals and objectives. This should guide your home loan approval process.
Working through relevant personal and financial goals should help a lender or mortgage broker find you a home loan suited to your circumstances.
Common areas of discussion borrowers can expect are:
- How long they intend to hold their property.
- The potential impact of retirement age can sometimes be an appropriate talking point given home loans are commonly over a 30-year term.
- Loan features like offset accounts vs redraw.
- Navigating any upcoming life events that might impact ability to meet home loan repayments like parental leave.
Home loan ready – explained
Part of getting ready or staying ready for the home loan approval process is understanding what contributes to a successful home loan approval.
Your mortgage broker or lender should be able to help you complete any gaps in your financial profile before making a home loan application.
My home loan boot camp covers some key areas about the home loan approval process. You can do this anytime – even before your initial meeting.
Read it, get across it and if you need to dig deeper then go for it.
The home loan boot camp is a way for borrowers to feel empowered and confident as they prepare for the home loan application.
Property research while you wait
The other area future homeowners can make a start is the fun part. Start looking at properties within your budget. Explore suburbs, restaurants, transport links and everything you consider important.
Visit home opens
Start looking at properties for sale—in person. Researching real estate online is a wonderful place to start but walking through properties can tell you so much more. Traffic noise, accessibility, neighbours, streetscape—the list goes on.
By visiting and walking though properties for sale you can also refine your list of ‘must-haves’ and ‘nice-to-haves’ when it comes to property features.
Your property search may seem daunting at first, but once you know what you are looking for, your search can be more targeted. Given it is not a transaction you are likely to perform often, you want to get it right.
Free property reports
While you are pulling together the financial information needed to apply for a home loan, it could be helpful to understand more about property values. The more you know about property valuations, the more confident you can be when it comes to negotiating a price for your new home.
Understanding property valuations has many benefits if you are a prospective buyer. Given many popular real estate sales campaigns do not even provide price guides, how can you be sure an offer is not too little or not too much?
There are many free property reports that can help buyers understand property values. Property reports information can offer many layers of detail for those willing to look:
- Suburb prices and trends
- Suburb demographic information
- Sales price information for specific properties

Whether you are looking for the ‘deal of a decade’ or just want the comfort of not overpaying for a property, these free property report tools can prove valuable.
The next stage is a big one. It is optional but still significant step in any home buying process.
Pre approval home loan – explained
What is a preapproval?
An application for a pre approval home loan is an application for a home loan without having yet found a property.
Make no mistake, a pre approval is a home loan application that will impact your credit file. So, like any application for credit, treat it with the level of attention it deserves, as a decline could adversely affect your credit score and potentially hamper future home loan applications.
Once a pre approval home loan has been given, it will come with conditions—usually lots of them. The conditions around a preapproval reflect a home loan assessment done at a point in time, so likely needs revisiting once a property has been found.
Is pre approval worth it?
Although there are several reasons for obtaining a pre-approval as part of your home loan approval process, it’s important to remember that it’s not mandatory for home buyers. Typically, many buyers make their initial finance application only after they’ve made a successful offer on a property.
Here are three reasons for getting a pre approved home loan:
- Buyer comfort
Obtaining pre-approval during the home loan approval process can give buyers the confidence to make offers on properties.
- Seller appeal
A pre approval can help a prospective home buyer stand out from the crowd in a competitive market.
- Buying at Auction
While pre approval is not the same as unconditional approval, it can be a smart option for buyers who like the idea of reducing any finance risk associated with buying at auction.
Engage a conveyancer – explained
This is a stage of the home loan approval process where you can consider taking the initiative. It should make for a smoother transaction for both parties if everyone is informed upfront.
What is a conveyancer?
A conveyancer is someone both buyers and sellers can engage to help with the transfer of property ownership. Different professionals can operate within this space in Australia depending on the state they operate in. They are commonly qualified as a solicitor, settlement agent or conveyancer.
In some states it is common for a conveyancer to only be appointed “after” the agreement to purchase has been signed off.
Think about that for a moment….without a conveyancer, the only person discussing the offer to purchase a property with the buyer is probably the seller’s real estate agent—it does not make sense.
Conveyancers assist buyers every day with the transfer of ownership from sellers to buyers. They also see mistakes from buyers who were slow to engage their services. Why not tap into their experience?
Buyers should consider getting a conveyancer involved early in their home buying process.
Buying your home – explained
The process of buying a house and the home loan approval process intersect when a buyer needing finance has an offer to purchase a property accepted. When finance is needed to assist with the purchase funds, there is usually with direct reference to a finance clause in the purchase agreement.
Offer to purchase
A buyer can usually nominate any conditions they wish in an offer to purchase. In doing so they usually consider a balance between protecting themselves with offer conditions and putting a seller off—with too many conditions.
Areas of a purchase agreement that conditions might look to address are commonly:
- Finance approval
- Building and pest inspections
- Sale of existing property

Offer accepted – what now?
Once you have an offer accepted on a property it is time to set your home loan approval process in motion.
At this stage you will likely pay a ‘deposit’ as part of the purchase agreement. This is usually held in a trust account and not the “same deposit” we refer to when explaining how much deposit you need for a home loan. Consider this deposit as a representation of a buyers commitment to the purchase. It is usually held on trust while the purchase agreement is worked through and can be used as part of the overall contribution to the purchase from the buyer.
Finance clause
A finance clause is a common condition contained within offers to purchase a house. The common reference to this type of conditional offer to purchase is that the offer is “subject to finance”.
The “finance condition” should make it clear to the seller that, while the buyer wants to purchase the property, they need a home loan approval to assist with the funds required to complete the transaction.
Without the home loan approval, it is unlikely the buyer can produce the funds required, so the agreement to purchase cannot proceed—the deal is off. Well, that is the spirit of the clause anyway.
Make sure you get appropriate financial and legal advice prior to offering to purchase any property.
No finance clause
There are times when a home loan is needed to assist with a property purchase, but buyers elect not to use a finance clause—often termed a “cash offer”.
Sometimes buyers do not have the option of inserting a finance clause into an offer to purchase, as is the case of an auction.
In these instances, the buyer takes on the risk that their home loan will be approved. While there are some steps they can take to minimise their risk, like a pre approval, the risk remains that their home loan application could be declined. This can lead to significant legal and financial ramifications. Again, buyers considering this approach should seek appropriate legal and financial advice.
If finance approval is needed, now is the time to request it.
Applying for a home loan – explained
You can apply for a home loan directly with a lender or use a mortgage broker to assist you with the home loan application.
At this stage you will need to provide all the required documents to support your home loan application which can feel overwhelming. A good lender or mortgage broker should be able to help bring all this together. I often joke that this part of the process is like a group assignment, requiring contributions from everyone—but the result is worth it.
Before applying for a home loan, you should be clear on all aspects what you are asking the lender to approve. A mortgage broker should make this clear when they present you with their proposal for your home loan. Various home loan features should have been decided upon such as:
- Lender
- Home loan product
- Repayment amounts
- Loan term
- Features like offset accounts
Other related aspects of a home loan application that should be in order at this stage. These usually relate to any government grants or schemes you could be eligible for such as:
- First Home Owners Grant
- First Home Guarantee
- Family Home Guarantee
How long does a home loan approval take?
Typically, around two weeks. It will depend on quality of information provided, complexity of proposal, and lender wait times.
Already have a pre approval?
Converting your preapproval to an unconditional approval with a lender will normally involve providing up to date documents in line with any pre approval conditions.
The obvious update is now you have a contract of sale to show your lender.
Any changes in your financial position between the stages of pre approval and applying for a home loan could affect your home loan application result.
Conditional approval
A conditional home loan approval is home loan application stage that is one step closer to unconditional approval. Not all home applications reach this point and some home loan applications can bypass it completely.
Conditional approval is usually issued by a lender when they are comfortable with most aspects of your home loan application but cannot unconditionally approve it—yet. While this may stall the home loan approval process, the good news is that the lender has not seen reason to decline your home loan application.
Typical conditions borrowers see can range from simple to more complex. Examples of conditional approval conditions can be:
- Property valuation to meet bank requirements
- Explanation of significant deposits or credits to an account
- Providing latest payslip
Unconditional approval – explained
At the stage of unconditional approval you will usually be in close contact with your lender or mortgage broker, the real estate agent and your conveyancer to ensure any relevant finance-related clauses in your purchase agreement are met.
Loan offer
An unconditional approval paves way for a formal loan offer to made to the borrowers.
This is the borrower’s chance to review the loan offer before signing it along with any accompanying mortgage-related paperwork.
Other paperwork
Although a lender may have issued an unconditional approval, they may still impose conditions which relate to the loan funding. An example of this is a settlement condition such as building insurance. This usually means a lender will only advance the loan funds when they see evidence that the building (which they are taking on as security for you home loan) is adequately insured.
This period of the home loan approval process often sees a flurry of activity. All of which requires different degrees of review, signing and acknowledgement. At this stage your conveyancer will likely produce a range of paperwork for you to sign and return. These can relate to contract conditions, ownership transfer and stamp duty declarations.
If any further contributions to cover deposit and costs (like stamp duty) are needed prior to settlement you will be advised.
Once all the above paperwork is in order your lender and settlement agent should coordinate with each other to book in a date for settlement—when the property officially becomes yours.
Settlement – explained
Provided the buyer is represented by a conveyancer there is usually no need to be present at settlement. It often occurs over an electronic system requiring co-operation by the following groups:
- Buyer’s lender
- Buyer’s conveyancer
- Titles office
- Seller’s lender
- Seller’ conveyancer
If today is settlement day, the home loan is now live.
Tonight, will see the first amount of interest calculated.
In a month (on most loans) interest will be debited to the loan account.
You might pay your first home loan repayment a week, a fortnight or a month from now – and so it goes…..
Final word
There are many moving parts to the home loan approval process.
If the home loan approval process flowchart makes clear one thing, then this is it—start early.
Have discussions with qualified people (not just friends and family) about home loan options suited to your situation—no one else’s.
The earlier you begin, the more informed and prepared you are, the more likely your home loan application will be successful.
References
Australian Institute of Health and Welfare (AIHW), Home ownership and housing tenure. Viewed 13th April 2023, https://www.aihw.gov.au/reports/australias-welfare/home-ownership-and-housing-tenure