All lenders are likely to ask for the same information. If you’re approaching a lender for the first time you’ll need to be ‘identified’. When you apply for a home loan you will be required to produce photo identification, for example a driver’s licence or passport. Only original documents qualify. It’s common for a home loan application form to take up to 10 pages.
Your lender will want to ascertain your:
- capacity to repay,
- financial risk,
- collateral (will the property you are buying be adequate security for the amount borrowed?), and
- existing assets.
You will also be asked:
- if you have dependent children,
- how long you have lived at your current address,
- what you owe and own,
- your personal insurances, and
- your credit card details.
It is advisable to have:
- your two most recent pay slips,
- group certificates for the past two years, and
- documentation from your employer detailing income and length of employment.
Self employed applicants should provide their past two years’ ATO assessment notices or their past two years’ financial statements and accountant’s details. Some institutions may even ask for a pro t and loss statement certified by a registered accountant.
Also needed are savings details, bank statements including transaction, saving or passbook accounts, investment papers including managed funds or term deposits, what you owe and own, details of personal loans, credit cards or charge cards and tax liability if self-employed.
Details of life insurance policies and superannuation as well as approximate value of other assets such as furniture and jewellery should also be included.
Remember to include your expected rental return in your loan application. This will affect your borrowing capacity and loan serviceability and may allow you to purchase a more expensive property. Your real estate agent will be able to provide this information.
It is best to have your loan pre-approved before you make any offers. Knowing that your nance is pre-approved will allow you to concentrate on a price range and give your full attention to the purchase. Remember that a vendor may also accept a lower than advertised price knowing that your nance is organised. They may want a quick and hassle free sale. Once your loan is formally approved, we will arrange mortgage documents to be signed. Be sure to read the mortgage contract carefully and understand its contents.