When applying for a home loan, it pays to be organized so you can make your application as quick and hassle free as possible. The information you will need to provide to your lender will vary depending on your personal circumstances and who you are applying for a loan with. For instance, a self-employed applicant will require different documents than someone who works for a company. We’ve pulled together a brief guide to help you know in advance what you’ll need to get in order before applying.
Before someone lets you borrow the cost of a house, they are going to want to know that you are who you say you are. Requirements will vary from one lender to the next. Typically you will need to pass the Federal Government’s 100 point system. If you are already an existing customer with the provider, they may require less documentation.
The lender is going to want to know that you can meet your loan repayments, and for that they will need supporting documentation from all your sources of income.
PAYG employees: You can either provide recent payslips, or in some cases bank statements showing your salary going into your account.
Self-employed: Lenders will require an individual and business tax return, a recent ATO notice of assessment, financial statements and may also want the details of your accountant.
Other Income: If you’re receiving income from rental properties, investments (e.g. shares), superannuation, or government income (e.g. Centrelink), you will need to show the required documentation.
Assets and Liabilities
The lender will want to know what you own, and what you owe, in order to determine your capacity to repay the home loan.
Assets: Bank account details for proof of your savings, a list of any shares, property or significant assets and their valuation and supporting documentation.
Liabilities: Any loans, credit cards, store cards, leases and other personal debts.
In order to assess you as a borrower, lenders often pull your credit report (with your verbal or written permission).
It’s a good idea to be completely across everything that’s on your report so that you can make sure there are no errors that are dragging down your score and so you are prepared to explain any blemishes or discrepancies on your credit report that the lender may ask about.
Another great reason to be across your credit report is that some lenders may offer special rates to people with a good credit history so if you’re going in informed you can use your excellent credit history to see if you can get a better rate.
The lender may want you to provide them with an indication of your day to day living expenses, including things like food, transport, clothing, utilities, insurance, education and health care.
In order to secure a loan, the lender will need to be sure that you are able to afford to make the payments by assessing your income, assets, debts and credit history. The documents required will vary depending on your circumstances and the lender. It is worth checking if the lender has specified what is required on their website.
Looking for more information? Get in touch with an Aussie Mortgage Broker to discuss your home loan needs. Appointments are free of charge and at a time that suits you.