Over the years, we have improved the industry standard loan processing procedures to assist property investors. Let’s consider a typical loan application:

Step 1: Loan Lodgement
You have decided to apply for a particular mortgage following a phone or face-to-face interview. You will need to provide the necessary Supporting documents to Investors Direct and we will put your loan application together and lodge it with the selected lender.

Investors Direct will endeavour to lodge your application within two working days after
all supporting documents are ready. You will be notified if there is any delay. You’ll receive notification from us as soon as the loan is lodged.

Step 2: Lender confirmed
Your chosen lender will enter your loan application into their system, and acknowledge the receipt of your application. You’ll receive notification from Investors Direct as soon as the lender confirms its lodgement.

Step 3: Conditional approval
The lender will go through their normal credit routine to check your credit report, income servicing, etc. Once they are happy with your application, they will issue a conditional approval. There might be one or more conditions attached to the approval, the most common of which is valuation of the property.

Many lenders promise 24 - 48 hour turnaround for a conditional approval. Investors Direct will notify you about the approval and the conditions associated with it. There may be some input required from you to meet some of the conditions, so your assistance here will be critical to ensure the speedy process of your application.

Step 4: Valuation ordered
Following conditional approval, the lender will issue a valuation order to a panel valuer to confirm the value and conditions of the security (your property).

Lenders may instruct valuers to do either a drive-by valuation or a full valuation depending on the application. It normally takes 3 working days for the valuation to be returned to the lender, but it the case of a full-valuation, valuers may have difficulty accessing the real estate agent or tenants to gain access to the property, and this may cause additional delay. Some lenders choose to order the valuation before conditional approval to speed things up.

Investors Direct will notify you when your valuation is ordered.

Because valuation is such a critical step for property investors, Investors Direct has taken a proactive approach with some lenders and their valuers. We usually order the valuation on behalf of the client. If the valuation comes in below expectation, we liase with the client to bring to the valuers attention sales figures and other critical information that the valuer may not be aware of so that the valuer can make a more informed decision before the valuation report gets sent to the lenders and mortgage insurance companies
We provide this additional service free to our investor clients because we have found that our investor clients in general know their property prices better than the average homebuyer and have in-depth knowledge and timely information about their properties.

Step 5: Valuation returned
The valuation report is returned to the lender normally 2-3 days after the valuation is ordered. If the valuation is as expected, the loan will automatically go to the next step.

If the valuation is lower or higher than expected, the lender usually requests that the borrower confirms the adjusting of the loan amount. In the case of a higher amount, a serviceability test may need to be re-run to ensure that the borrower can still service the debt. In the case of a lower amount, the borrower may need to provide new evidence to influence the valuer’s decision if they want to challenge the valuation.

Most lenders will ignore the valuation if it’s higher than the contract price. For property investors this can be very frustrating especially when they bought under market value.

Investors Direct has permission from certain lenders to do second valuations, and the lower of the two valuations will become the final value regardless of the contract price.

Step 6: Unconditional Approval
Once all conditions are met and the borrowers are happy with the valuation, the lender is in a position to issue an unconditional approval for the loan application.

Unconditional approval is usually given on the same day as the valuation is determined if there are no other outstanding conditions. Investors Direct will notify you of the approval on the same day.

For the refinancing client, once the unconditional approval is confirmed, you may want to lodge your discharge authority with your existing lender, as they may need up to 10 working days before they can discharge your existing mortgage.

Step 7: Documentation Issued
Once your application is unconditionally approved, the lender’s lawyer will issue the
following documents:

•     Loan contract
•     Mortgage document
•     Terms & conditions
•     Disbursement authority etc.

These documents will be sent to you directly by the lender’s lawyer for review and
signatures, some may even require independent legal advice. Since Investors Direct
normally do not receive these documents, you will need to read them carefully and make sure they are what you expected.

Investors Direct will notify you that the documentation has been issued. If you don’t receive it within two days after notification, it is important that you inform us so we can follow it up. We allow up to five working days before you must return the documentation to the lenders. During those five days we assume that you have the documentation and go through the process of legal advice, etc.

Step 8: Documentation Returned
Once you (and possibly your legal adviser and accountant) are happy with the documentation, you will return all the signed documentation to the lender.

Return the documentation to the lender as soon as possible, as their settlement lawyer will do a final check before they can book settlement. Errors will delay the settlement.

Step 9: Settlement Booked
The lender’s lawyer will book a time to settle the transaction with your lawyer (or conveyancer) if it’s a purchase, or with your existing lender’s discharge department if it’s a refinance. You may be asked to get a bank cheque for settlement if additional cash is required to complete the transaction.

Step 10: Settlement
If everything has gone smoothly up to this point, there shouldn’t be any problems with the settlement process.

Step 11: Post-Settlement
Ensure that all accounts are set up correctly. Most lenders give a contact number for assistance.