Home Loan Application Guide

Understanding what happens after you decide to apply for a home loan removes much of the anxiety from the process. From submitting your documents to receiving the keys at settlement, the home loan approval process typically takes 2 to 6 weeks — though the timeline can vary based on lender workload, valuation scheduling, and how quickly you provide supporting documents.

This guide walks you through every stage, from what documents you need to what happens on settlement day. See also: our pre-approval guide, the settlement process, and our full home loan service.

Stage 1: Documents Required

The most important thing you can do before submitting a loan application is prepare a complete, organised document pack. Incomplete applications cause the most delays. You will need:

Identity Documents

Primary ID: Australian passport or driver’s licence
Secondary ID: Medicare card, birth certificate, or utility bill
Most lenders require 100 points of ID (passport alone = 70 points; supplement with Medicare or licence)

Income Evidence

PAYG employees: 2 most recent payslips + most recent group certificate (or ATO income statement). If recently changed jobs, an employment contract or letter from your employer confirming salary and tenure.
Self-employed: 2 years of tax returns (personal and business) + 2 years of business financial statements (profit and loss, balance sheet). ATO Notice of Assessment for both years.
Rental income: Lease agreement + 3 months rental statements, or latest tax return showing rental income schedule.

Bank Statements

3–6 months of transaction account statements (main spending and savings accounts)
3 months of statements for all existing loans, credit cards, and investment accounts
Evidence of genuine savings — typically 5% of purchase price held for at least 3 months

Asset Statements

Superannuation most recent statement
Share or investment portfolio statements
Rates notice or letter of offer if using equity from existing property

Property Documents

Signed contract of sale (once available)
Strata report (for units and townhouses)
Building and pest inspection reports (if applicable)

Stage 2: The Assessment Process

Once your broker or lender receives a complete application, a credit assessor reviews it — typically within 2–5 business days for straightforward applications. The assessor checks:

Serviceability: Can you afford the repayments at the assessment rate (actual rate + 3% APRA buffer)?
Credit history: Are there any defaults, court judgements, or missed repayments on your credit file?
Genuine savings: Have you held funds for the required period?
LVR: Does the loan amount sit within acceptable LVR limits for the chosen product?

Stage 3: Conditional Approval

If the application passes initial assessment, the lender issues a conditional approval (also called approval in principle). This confirms the lender is satisfied with your financial position but subject to further conditions — most commonly, a satisfactory property valuation.

Conditional approval is not a guarantee of the final loan. Conditions must be met before unconditional approval is granted.

Stage 4: Property Valuation

The lender orders a valuation of the property you’re purchasing. Depending on the lender’s risk appetite and the purchase price, this may be:

Desktop valuation: An automated valuation using recent comparable sales data. Fast (1–2 days) and free. Used for low-LVR, low-risk transactions.
Drive-by valuation: A valuer inspects the exterior only and compares it with recent sales. Used for moderate LVR transactions.
Full inspection valuation: A registered valuer conducts an internal inspection and prepares a written report. Can take 3–7 business days to schedule and report. Required for higher LVR loans or unusual properties.

If the valuation matches the purchase price, the assessment proceeds. If the valuation is below the purchase price, you may face a shortfall. See our property valuation guide for how to handle this.

Stage 5: Unconditional Approval (Formal Approval)

Once all conditions are met — including a satisfactory valuation — the lender issues unconditional approval (also called formal approval or loan approval). This is a binding commitment from the lender to provide the loan. You will receive a formal offer letter specifying the loan amount, rate, term, and all conditions of the facility.

Typical timeline from application submission to formal approval: 10–20 business days.

Stage 6: Loan Documents

After formal approval, the lender’s solicitors prepare loan documents (the mortgage document, loan offer, and any security documents). These are sent to you (and your solicitor/conveyancer) for signing. You must:

Review and sign the loan offer
Have the mortgage documents witnessed (usually by a Justice of the Peace or legal practitioner)
Return the signed documents to the lender — usually within 5–7 business days

Stage 7: Settlement

Once the lender receives and certifies the signed loan documents, settlement is booked. On settlement day, the lender funds the loan directly to the vendor’s solicitor via the conveyancers. You take legal ownership of the property. See our detailed settlement process guide for what to expect on the day.

Typical total timeline: 2–6 weeks from full application submission to settlement, excluding the pre-approval stage.

Frequently Asked Questions

What is the difference between pre-approval and formal approval?

Pre-approval is a preliminary assessment of your financial capacity based on your income and liabilities — without a specific property. Formal approval is a binding commitment tied to a specific property, after valuation and full underwriting. Pre-approval is useful for bidding at auction with confidence but is not a loan guarantee.

Can I speed up the approval process?

The biggest delays come from incomplete documents and valuation scheduling. Submit a complete, organised document pack from day one. Instruct your conveyancer immediately after exchange so they are ready to liaise with the lender on settlement dates. Avoid changing jobs or taking on new debts during the assessment period — these trigger a full re-assessment.

What if my financial situation changes between application and settlement?

You must notify your broker and lender of material changes to your financial situation — for example, a change of employment, reduction in income, or new debt. Failing to disclose changes can result in a breach of your loan terms and, in serious cases, constitutes a false and misleading statement on your application.

Get Expert Advice from Lagos Financial

With close to 20 years of experience and access to 60+ lenders, Victor Lagos and the Lagos Financial team can help you find the right loan for your situation. Book a free assessment or call us to discuss your options.

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About the Author
Victor Lagos is a licensed mortgage broker (ACL 546774) and founder of Lagos Financial, with close to 20 years of finance industry experience since beginning his career at Bluestone Mortgages in 2006. A member of the Finance Brokers Association of Australia (FBAA) since 2015 and the Australian Financial Complaints Authority (AFCA — 98399), Victor helps Australians build wealth through tailored home loan and property investment strategies, working with 60+ lenders nationwide. Last reviewed: March 2026.

Home Loan Application Guide | Step-by-Step Process