Finalising Your Loan

What needs to happen to make your new home really, truly yours?

Remember, any advice provided on this website is of a general nature only and does not take into account your personal needs, objectives and financial circumstances. You should consider whether it is appropriate for your situation.

You're nearly there. The finish line (your new home) is in sight.

After all the hard work is done... how do you pay for it?

Get your pride and joy insured

You need insurance. It's going to be a condition of your loan - your lender won't hand over squat until you have it and may require they’re listed on your policy.

This feels obvious, but buying a new home is exciting and things can get missed. Before you set foot through the front door, it must be insured. Once that property is yours, everything that happens to it is your responsibility. Burns down? Floods? No one is paying for that except you.

Home insurance isn't the same as contents insurance. Generally, it covers the actual building, and not what's inside it. If a tree falls on your roof, your insurer will likely pay to fix the tiles (depending on the cover you have). So while you only have to get the one, you might want to think about both.

Read the policy carefully so you know what's actually covered. Don't assume everything is covered.

Final loan sign-off

You've already got pre-approval, but that's not the same as having a loan. Now your lender will confirm your identity, make sure you can make payments, and check your credit history. These details might have changed since you got pre-approval, especially if you bought something really different from what they expected (maybe check with them before you do that), or if something in your life has changed.

You might also decide you want to have a different lender than the one you did pre-approval with, and this is a time when you can change your mind.

Once that's done, you're ready to sign! With some lenders, you'll need to go into a branch to set up your mortgage account, but it's getting a lot more common to do it online.

Getting ready for settlement

First, you'll sign all the big documents online (you absolutely must read them even though they're just impressively, phenomenally boring). Second, your lender will make you a new account, and attach an offset account if you're getting one. Third, you'll put all the money you're personally contributing (your "contribution") into your new mortgage account.

Then, it's over to your squad. Your conveyancer, your lender and a joint called PEXA will join forces to make sure your money can be securely transferred for settlement. They'll set a day and a time for it all to go down but usually, you won't touch the money at all. You'll just get a text: it's done! That makes it heaps quicker and more secure.

If it can't be done in PEXA, your conveyancer can walk you through alternative options.

Sometimes settlements can be delayed. This is frustrating but only rarely means things will actually fall through. However, it's a good idea not to schedule the moving truck for the exact time settlement is meant to happen.

Making your first mortgage payment

Typically, you won't need to start making payments until after you've moved in. Your lender will set the date for the first payment, which is usually a fortnight, a week or a month after the settlement date (depending on what you choose). You can move in right after you settle, so you get a little breathing room.