Loan Application Documentation Checklist
When you are ready to apply for a home loan, there will be a number of items that the lender will ask you for, in order to determine how much you can borrow and assess your ability to make mortgage repayments.
It is a good idea to use our home loan documents checklist and have the following paperwork ready:
|Proof of identity (you will need at least one form of photo ID)|
|Proof of age card/Australian tertiary institution card, Department of Defence ID, Waterways/Boat licence|
|(If you only have one form of photo ID, you will also need to supply secondary identification)|
|Birth certificate (required if you will be applying for the FHOG)|
|Centrelink pension card|
|Current/recent rates or utilities bill|
|Tax assessment notice (most recent)|
|Income||Two latest payslips or a letter from employer stating length of employment (if still on probation), gross and net income, regular overtime and allowances.|
|If self employed, you will need your income tax returns from the last two financial years, and your most recent Assessment Notice. Some lenders may require profit and loss statements certified by a registered accountant.|
|Confirmation of any Centrelink payments you receive (eg. Family Benefits).|
|Details of any other income, bonuses, allowances or benefits.|
|If buying an investment property, you will need to supply either a copy of the lease agreement with the current tenant, or a letter from your property manager confirming estimated rental income.|
|Confirmation of net rental income received from any other investment properties.|
|Expenses||Details of your rent/board payments|
|Council and water rates|
|Electricity and gas bills|
|Details of any extraordinary expenses (eg. private school fees or maintenance/child support payments).|
|Assets||Bank statements showing history of savings (usually 3 months).|
|If using the settlement from another property as your deposit, you will need a letter from your solicitor confirming the net settlement amount.|
|Should your deposit/part thereof, be a gift you will need a statutory declaration showing how much of the deposit is a gift and that the amount does not need to be repaid. Some lenders may need proof that the gift has been in your savings account for a 3 month period.|
|Details of assets including superannuation and any shares held.|
|If other investment properties are owned, you will need to provide copies of the rates notices on each property.|
|Confirmation of other assets (eg. insurance statements which include sum insured for your motor vehicle assets and your home contents value).|
|Liabilities||If you have a current mortgage, you will need to provide a minimum of 3 months loan statements.|
|You will need to provide the most up to date statements for your car or personal loans and credit card/s or store cards.|
|Other||If you have already identified the property you will need to supply:|
|Copy of the contract|
|Copy of the certificate of title|
|Copy of transfer of land|
|If you are a builder, your broker will also need to see a copy of council approved plans, the building specifications and your fixed price contract (construction/renovations) from your builder.|
|If you are refinancing, your broker will also need to see:|
|The loan statements on the property you are refinancing|
|Details of the home to be refinanced (eg. number of bedrooms, bathrooms, garages and other inclusions)|
How can a home loan application checklist make applying for a loan easier?
Can my income details give me an indication of whether or not my application will be approved?
Making sure your loan application details are in order before you apply is obviously important. This is important for many reasons, not the least because it is worthwhile thinking beyond the application stage. If your application is accepted, you enter into a contractual agreement to pay it back. Thinking about what happens if your loan is approved is one thing, but thinking about what happens if your application is rejected is another. Having a loan rejection on your credit history can be a red flag for future loan applications. So, it’s vital to ensure your loan application is as complete as possible before submitting. It’s also important to be realistic about your loan application, especially when it comes to income. Put yourself in a lender’s shoes. Take a look at our borrowing calculator to get an indication of how much you might be able to borrow. From there you can get an idea of whether your income is sufficient to pay off the loan you are applying for. Speak with our expert lenders, who can do some quick calculations and give you a further indication of your chances of success. So, make sure your income statements are accurate and make sure every other aspect of your loan application is correct. Double and triple-check it just to be sure.
What payslip information will I need?
One of the key parts of proving your income when applying for a loan is your payslip. Most banks and lenders require at least your two most recent payslips and some documentation from your employer outlining how long you have worked in your current job. It can also be important to have documentation that outlines how much overtime you have done in the past year and any extra allowances. It can be especially important if you are a shift worker and often work extra or irregular shifts. It can also be important if you are, for example, a nurse, and have regular 9-5 hours in one part of the hospital, but often take extra shifts in another section, at odd hours. In this case, it can be important to show your full income, even if it means going back over the current financial year. But what happens if you are self-employed, or a contractor or freelancer and are unable to provide the regular income documentation? If that’s the case, make sure you have the past two financial years’ tax returns available, so banks and lenders can see a pattern of income, as well as your most recent Assessment Notice. Some lenders may also require profit and loss statements. It may be recommended you apply for a low doc loan, which can have less paperwork requirements. But, you will still need a good credit rating.
What about rental income?
If you are buying an investment property, banks and lenders may want to see a copy of the lease with the current tenants, or at least a letter from the property manager outlining the estimated rental income of the property you want to buy. And if you already own an investment property, make sure you have evidence of the net rental income on hand. This is an important part of you presenting your income for a loan application.
What do I do if I already have a personal loan?
It’s also important to have the details of your personal or car loan available if you have one. Providing the most recent statement can let the bank or lender know exactly what your repayments are, and how much of the loan you still have to pay off. Something that might be worthwhile if you are applying for a mortgage is to refinance the personal loan into our mortgage amount. This can save you money, given a mortgage can be for as much as 30 years. You can save on interest, and you may hardly notice the extra repayments as part of your mortgage.