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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.
Fluctuating markets are unpredictable and
it may be advisable to include a Subject to
finance clause in the contract. This clause will
cover a shortfall in preapproved finance if a
property does not meet the lender’s valuation.
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 profit 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.
Loan approval
It is best to have your loan preapproved
before you make any offers. Knowing that
your finance is preapproved 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 finance 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.
APPLYING FOR A LOAN
