Come prepared- Home Loan Preparation Guide

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Come prepared- Home Loan Preparation Guide

Take the stress out of applying for a home loan with a little preparation. Here are a few things you can expect to encounter when seeking your home loan approval…

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.

ID check

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.

Income suitability

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.

Assets and liabilities

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.

Establishing your expenses

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.

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6 Comments

  1. Angela says:

    Thanks for the tips Lifestyle! Being prepared let me settle sooner.

  2. Jessica J says:

    As a normally pretty organised person – I was quite surprised to find out when I applied for my home loan that I was under prepared. Things like a full 100 points ID you’ll rarely have in your purse/wallet.

  3. Thanks for the replies! Lenders tend to change their documentation requirements frequently. Any good broker will have upto date requirement lists for you before you meet to make things easier.

  4. Jessica Hamilton says:

    Have the banks documentation requirements increased recently? I only ask as when I applied to one of the big 4, I was required to supply payslips, group cert, letter from employer AND a 6 months bank statements showing my salary.

    Apologies for the mouthful but it was a massive amount of trouble to acquire and I’d just like to know if this is the norm.

  5. rencontrecoq says:

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  6. Appreciate all the comments- keep them coming!

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