Whether you are applying for your first or fourth home loan, the process can seem overwhelming. But it doesn’t have to be. By familiarising yourself with some of the common home loan requirements and terms, you will immediately feel more confident when applying for your next home loan.
Firstly, you will need photographic proof of identity – a current driver’s licence, passport or proof of age card will suffice. You will also need secondary documentation, such as a Medicare card, rates notice or utility bills that are no more than three months old.
Most lenders will be looking for as much information as possible, so it’s a good idea to bring as many of these documents as you have available.
When determining your borrowing capacity, lenders will request information and documents from you outlining your financial situation. This will include payslips, bank statements and written references from your current employer.
Be prepared to declare everything you own and any outstanding debt you have at the time of application.
This information will go a long way to help the lender assess what you can afford and to determine your borrowing capacity.
Remember to take recent bank statements for any savings accounts and term deposits accounts you have, as well as details on any current liabilities or financial obligations that you have individually or with someone else – these might include Higher Education Contribution Scheme (HECS) statements, credit card statements and other repayment records.
Your ability to meet monthly loan repayments is paramount for lenders, so be prepared to outline all your current expenses.
Instead of plucking numbers from the air, make a list of your monthly outgoings. Your list should include everything from rent, utility bills and travel expenses to gym memberships and leisure activities. Also factor in any personal health insurance or other insurance premiums, you may have.
This will not only help your lender evaluate your loan application, it will also give you a good indication of what you can realistically afford.
While you may encounter some troubles along the way, coming prepared when applying for a loan can make the whole process run a lot smoother.
If you are unsure of what is required, please don’t hesitate to contact us for more information.