Home Loan Services - Ryro Loan Centre

Home Buying Guide – 5 Easy Steps

Step 1 – Make an offer

Make an offer, pay an initial 0.25% deposit. You will then go in a ‘cooling off period. This period by default is 5-10 business days.

PS: One should never pay 10% without having unconditional approval from the bank.

During this time, you will need to :

  • Get Property valued to make sure it is at the purchase price.
  • Get unconditional approval from the bank.
  • Order building and pest control (optional, costs approx. $500)
  • Get your contract checked with your conveyancer/Solicitor.

Step 2 – Receive the unconditional approval and pay 10%

Once you have received unconditional approval then you should go ahead and pay 10% (formally exchange the contract). From this point onwards, the property is locked for you. As long as you are under cooling off, you can walk away from the property purchase, if you find anything in it that is not up to the mark. All you tend to lose is just that 0.25% of the purchase price.  Once you have paid 10% and formally exchanged then there is no going back, you must go ahead with the purchase.

Step 3 – Read the T&C’s & sign the contract documents

Once the loan is unconditionally approved by the bank, loan contract documents follow for you to sign. Different banks have different ways of sending these to you, some email them to you, some send them via DocuSign and some send still them through the physical post.

You will need to go through it carefully and understand the term and conditions. Once you have done that, sign and return them to the bank. We will go thru everything with you and make sure you understand everything that you need to know.

Step 4 – Buy Building Insurance

If buying a house the lender will ask you to buy building insurance for a minimum certain amount, this is mentioned in the loan contract documents. The lender would also want you to include their name as ‘interested party’ on this insurance, so you must mention which lender are you going with when purchasing the insurance policy. This certificate of currency will need to be provided to the lender.

Step 5 – Ready for Settlement

The lender receives the fully executed loan contract documents and certificate of currency (insurance), they will verify that all is properly signed and will get ready to book settlement.

You need to make sure you have parked funds in the shortfall account that you wanted to pay (on top of the payment made already during Step no2). This money must be paid into the nominated* lender account so they can deduct this directly and proceed to settlement.

You do not need to do anything on the settlement date. Once it is settled, your conveyancer should notify you of it and you just need to arrange keys pick from the real agent and plan to move in. Congrats the journey is now over.

Some important points to remember:

  • The usual settlement is 42 days unless otherwise negotiated. The first day is when you pay 0.25% or any initial amount, it is 42 days from there on in.
  • Once the loan is approved, the lender will open a new savings account, this account is what is usually used for any shortfall deduction.
  • What is a shortfall? Let us say you wanted to put a 15% deposit towards the loan. You have paid 0.25% initially and the balance 9.75% at the end of the cooling off. You still have the balance of 5% that you need to pay as part of your contribution. This is called a shortfall. The shortfall also includes conveyancer/Solicitor fees/ any council rates/ utility charges on a pro-rata basis.

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