Home Loan Approved — Next Steps

Introduction: The Approval Is Just the Beginning

Getting that call or email to say your home loan has been approved is one of the most exciting moments in the property-buying journey. You’ve done the hard work — gathered your payslips, organised your bank statements, and waited patiently while the lender assessed your application. Now you can breathe a sigh of relief.

But here’s what many first-home buyers (and even seasoned purchasers) don’t realise: approval is not the finish line. There are still several important steps between your lender saying “yes” and you walking through the front door of your new home with the keys in your hand.

This guide walks you through every stage of that journey — clearly, practically, and in the right order — so nothing catches you off guard. Whether you’re buying your first apartment in Sydney, a family home in Melbourne, or an investment property in Brisbane, the fundamentals are the same.

Let’s get into it.

Understanding Your Approval Letter

The first thing you should do after receiving your approval is read the approval letter carefully — every word of it. This document is not just a congratulatory note. It’s a binding set of terms that outlines exactly what the lender has agreed to, and what they expect from you before they release any funds.

What Your Approval Letter Typically Includes

Your formal approval (sometimes called “unconditional approval” or “formal approval”) will detail:

• Loan amount: The total sum the lender is willing to advance.
• Interest rate and type: Whether it’s fixed, variable, or a split arrangement, along with any introductory or discount rates.
• Loan term: Usually 25 or 30 years.
• Repayment schedule: Monthly, fortnightly, or weekly — and the estimated amount.
• Fees: Establishment fees, ongoing account-keeping fees, and any other charges.
• Conditions precedent: Specific things you must do or provide before the loan can settle.

Pay close attention to the conditions precedent section. These are non-negotiable requirements, and failing to satisfy even one of them can delay — or derail — your settlement.

Conditional vs Unconditional Approval

If your approval is conditional, it means the lender still needs something before they’ll commit fully. Common conditions include a satisfactory property valuation, proof of insurance, or updated financial documents. Unconditional approval (also called “formal” or “full” approval) means the lender is satisfied and ready to proceed, subject only to standard settlement requirements.

If anything in the letter is unclear, call us. That’s what we’re here for — and it’s far better to ask a question now than to discover a misunderstanding two days before settlement.

Satisfying Your Loan Conditions

If your approval came with conditions, you’ll need to address them promptly. Your lender will set a timeframe, and delays on your end can push out your settlement date — which may have contractual consequences.

Common Conditions You May Need to Meet

• Property valuation: The lender will typically arrange a valuation of the property you’re purchasing. In most cases, they organise this directly, but occasionally you may need to provide access or coordinate with the selling agent.
• Updated financial documents: If there’s been a gap since your initial application, the lender may request current payslips, a recent bank statement, or an updated employment letter.
• Proof of genuine savings: Some lenders require evidence that your deposit has been held in your account for at least three months.
• Proof of insurance: Building insurance (more on this below) is almost always required before settlement.
• Lenders Mortgage Insurance (LMI): If you’re borrowing more than 80% of the property’s value, LMI will be arranged by the lender and typically added to your loan or paid at settlement.

Stay on top of these. Respond to your lender or broker’s requests the same day wherever possible.

Arranging Your Building and Pest Inspections

If you haven’t already organised building and pest inspections as part of your pre-purchase due diligence, now is the time to make them a priority. In many states, these inspections are typically done before the cooling-off period expires or as a condition of your offer.

Building Inspection

A qualified building inspector will examine the property for structural defects, safety hazards, and maintenance issues. They’ll look at the foundations, roof, walls, plumbing, electrical systems, and more. You’ll receive a written report — usually within 24 to 48 hours — that flags any concerns.

Common findings include minor cracking (which can be cosmetic), moisture issues, non-compliant renovations, or roofing problems. A good inspector will tell you what’s serious and what’s normal wear and tear.

Pest Inspection

A pest inspection focuses primarily on termite activity and damage, but also covers other timber pests like borers. In Australia, termites cause more damage to homes than fires, floods, and storms combined — so this inspection is not optional in any practical sense, even if it’s not legally required.

The inspector will use moisture meters, thermal imaging cameras, and visual assessment to check for current infestations and conditions that could attract future problems (such as poor drainage or timber-to-soil contact).

What If the Inspections Reveal Problems?

If significant issues are found, you have options. Depending on where you are in the contract process, you may be able to negotiate a price reduction, request the vendor carry out repairs before settlement, or — in some cases — withdraw from the purchase. Speak with your conveyancer or solicitor about the best path forward.

Appointing a Conveyancer or Solicitor

If you haven’t already engaged a conveyancer or property solicitor, do so immediately after approval. These professionals handle the legal transfer of property ownership, and they’re essential to a smooth settlement.

Conveyancer vs Solicitor: What’s the Difference?

A licensed conveyancer specialises exclusively in property transactions. They handle title searches, contract reviews, and the settlement process. A property solicitor is a qualified lawyer who can do all of the above and also provide broader legal advice if complications arise (such as disputes, easements, or unusual contract terms).

For a straightforward purchase, either is suitable. For more complex transactions — off-the-plan purchases, properties with caveats or encumbrances, or rural land with water rights — a solicitor may be the safer choice.

What Your Conveyancer or Solicitor Will Do

• Review the contract of sale and explain any special conditions.
• Conduct title searches to confirm ownership and check for any encumbrances, easements, or covenants.
• In Victoria, review the Section 32 Vendor’s Statement — a legally required disclosure document that the seller must provide before a contract is signed.
• Liaise with the vendor’s legal representative to negotiate any amendments.
• Calculate adjustments for council rates, water rates, strata levies, and other outgoings.
• Coordinate the settlement with your lender, the vendor’s representative, and (in some states) the settlement agent.
• Ensure the property title is transferred into your name after settlement.

In some states, particularly Western Australia, a settlement agent handles the settlement process rather than a conveyancer. Your broker or solicitor can advise on the correct professional for your state.

Sorting Out Your Insurance

Your lender will require you to have building insurance in place from the date of contract exchange (or settlement, depending on your state). This protects their security — the property — from damage or destruction.

Types of Insurance to Consider

• Building insurance: Covers the physical structure of the property. This is mandatory for your loan. You’ll need to insure the property for its replacement value (what it would cost to rebuild), not its market value.
• Contents insurance: Covers your belongings inside the property. Not required by your lender, but strongly recommended.
• Landlord insurance: If you’re purchasing an investment property, this covers tenant-related risks such as loss of rent, malicious damage, and liability.
• Income protection insurance: Covers your mortgage repayments if you’re unable to work due to illness or injury. Worth serious consideration.

Shop around for building insurance — premiums and coverage can vary significantly between providers. Make sure the policy is active from the date of exchange, not the settlement date, as in most states you bear the risk of loss from exchange.

Understanding the Cooling-Off Period

In most Australian states and territories, buyers have a statutory cooling-off period after signing the contract of sale. This gives you a short window to change your mind without being locked in.

Cooling-Off Periods by State

• New South Wales: 5 business days. The buyer forfeits 0.25% of the purchase price if they withdraw.
• Victoria: 3 business days. The buyer forfeits 0.2% of the purchase price.
• Queensland: 5 business days. The buyer forfeits 0.25% of the purchase price.
• South Australia: 2 business days. No financial penalty for withdrawal.
• ACT: 5 business days. No financial penalty for withdrawal.
• Western Australia: No statutory cooling-off period (except for off-the-plan sales).
• Tasmania: No general statutory cooling-off period.
• Northern Territory: 4 business days. Buyer may forfeit 0.1% of the purchase price.

Important: Cooling-off periods do not apply to properties purchased at auction or where the buyer has waived the cooling-off period (via a Section 66W certificate in NSW, for example). If you purchased at auction, you are legally bound from the fall of the hammer.

Use the cooling-off period wisely — finalise your inspections, confirm your finance, and review the contract thoroughly with your conveyancer.

Exchanging Contracts

The exchange of contracts is the point at which the sale becomes legally binding. This is a significant milestone — once contracts are exchanged (and the cooling-off period has passed), both you and the vendor are committed to the transaction.

How Exchange Works

In practice, both parties sign identical copies of the contract of sale. The signed contracts are then “exchanged” between the buyer’s and vendor’s legal representatives. In most states, this happens electronically these days, though physical exchange is still possible.

At exchange, you’ll typically need to pay a deposit — usually 10% of the purchase price, though 5% is common in some markets and may be negotiable. The deposit is held in a trust account (usually the real estate agent’s or conveyancer’s) until settlement.

The Section 32 Vendor’s Statement (Victoria)

If you’re buying in Victoria, the vendor is required to provide a Section 32 statement before the contract is signed. This document discloses important information about the property, including:

• Title details and any encumbrances (mortgages, easements, covenants).
• Planning and zoning information.
• Building permits and occupancy certificates.
• Owner-builder warranty information (if applicable).
• Outgoings such as council and water rates.

Your conveyancer or solicitor will review this document carefully. Errors or omissions in the Section 32 can give you grounds to rescind the contract — another reason why professional legal advice is essential.

Paying Your Deposit

Your deposit demonstrates your commitment to the purchase. As mentioned, it’s usually 10% of the purchase price, but this can vary.

Where the Deposit Goes

The deposit is held in a trust account — typically managed by the real estate agent or the vendor’s solicitor — until settlement day. It is not released to the vendor until settlement is complete. In some states, the interest earned on the deposit is split between buyer and vendor; in others, it follows specific legislative rules.

Deposit Bond or Bank Guarantee

If your savings are tied up (perhaps in a term deposit or offset account), you may be able to use a deposit bond or bank guarantee instead of transferring cash. This is essentially a promise from a financial institution that the deposit funds are available. Not all vendors or agents accept these, so confirm early.

The Pre-Settlement Inspection

In the days leading up to settlement — usually 24 to 48 hours before — you’re entitled to conduct a pre-settlement inspection (also called a final inspection). This is your opportunity to walk through the property and confirm everything is as it should be.

What to Check

• The property is in the same condition as when you signed the contract (fair wear and tear excepted).
• All fixtures and fittings included in the contract are still present (light fittings, curtain rods, dishwasher, etc.).
• Any agreed repairs have been completed.
• The property is clean and vacant (unless otherwise agreed).
• All keys, garage remotes, and security codes are available for handover.

If you discover any issues, notify your conveyancer immediately. Minor problems can often be resolved by holding back a portion of the settlement funds until the vendor rectifies the issue. Major problems may warrant delaying settlement — but this is a decision to make with professional advice.

Settlement Day

Settlement is the day when ownership officially transfers from the vendor to you. It’s the moment your lender releases the loan funds, the vendor receives their money, and you become the legal owner of the property.

What Happens Behind the Scenes

You don’t need to attend settlement in person — your conveyancer, solicitor, and lender handle everything. In most states, settlement now occurs electronically through platforms like PEXA (Property Exchange Australia). Here’s what happens:

1. Your lender transfers the loan funds to the settlement platform.
2. The balance of the purchase price (loan funds plus your deposit and any adjustments) is transferred to the vendor.
3. The vendor’s existing mortgage (if any) is discharged.
4. Stamp duty is paid to the relevant state revenue office.
5. The property title is transferred into your name (or your name and the lender’s, as mortgagee).
6. Your conveyancer confirms that settlement is complete.

Settlement Adjustments

At settlement, various costs are adjusted between you and the vendor on a pro-rata basis. These typically include:

• Council rates: If the vendor has prepaid rates for the quarter or year, you’ll reimburse them for the portion covering your ownership period.
• Water rates: Similar to council rates.
• Strata/body corporate levies: For apartments and townhouses, these are adjusted at settlement.
• Land tax: In some states, land tax adjustments apply.

Your conveyancer will prepare a detailed settlement statement showing every dollar — review it carefully before the big day.

Getting Your Keys

Once settlement is confirmed (usually by early-to-mid afternoon), you can collect the keys. In most cases, the real estate agent will hold them for you. Some agents will call you proactively; others will wait for you to contact them. Either way, once your conveyancer gives you the green light, you’re free to go and unlock your new front door.

Your First-Day Checklist

• Change the locks: You don’t know how many copies of the existing keys are floating around. A locksmith visit on day one is a wise investment.
• Set up utilities: Arrange electricity, gas, water, and internet connections in your name. Many providers allow you to schedule the transfer for your settlement date.
• Update your address: Banks, Medicare, electoral roll, drivers licence, insurance policies — the list is long, but start with the essentials.
• Meet the neighbours: A quick introduction goes a long way, especially if you’ll need their patience during the moving-in process.
• Take photos: Document the condition of the property before you move your belongings in. This is especially important for investment properties.

Common Delays and How to Avoid Them

Settlement delays are more common than you’d think — and they can be stressful, costly, and entirely avoidable with the right preparation.

The Most Frequent Causes of Delays

• Incomplete loan documentation: Your lender needs every document signed, witnessed, and returned before they’ll release funds. Don’t sit on paperwork.
• Late insurance certificate: If your building insurance certificate isn’t provided to your lender in time, settlement will be delayed.
• Title issues: Unresolved caveats, incorrect property descriptions, or outstanding mortgages on the vendor’s side can all cause holdups.
• Bank processing times: Some lenders need 3 to 5 business days to prepare settlement documents after all conditions are met. Factor this into your timeline.
• Vendor delays: Sometimes the vendor’s side isn’t ready — perhaps their onward purchase has fallen through, or their solicitor hasn’t prepared the documents.

How to Stay on Track

The single best thing you can do is respond to requests quickly. When your broker, lender, or conveyancer asks for something, make it your top priority. Keep your phone on, check your email regularly, and don’t assume someone else is handling it.

And if anything feels uncertain, pick up the phone. We’d rather hear from you ten times with small questions than discover a problem the day before settlement.

We’re Here Every Step of the Way

At Financial Elements, we believe that great broking doesn’t stop at approval. We stay with you through every stage — from your first enquiry right through to the moment you turn the key in your new front door (and well beyond).

If you have any questions about your approval, your settlement timeline, or anything in between, don’t hesitate to get in touch. Call us on (02) 9707 7888 or reach out through our website. We’re more than just a pretty rate — we’re your partner in property.