So, you’re getting ready to apply for a home loan. Congratulations are certainly in order on you getting your hands on what could be your dream home! However, there are certain things that you won’t want to forget to prepare and have about your person as you get ready to apply and complete the process. Missing documents and information will only speed up your route to ultimate denial in your application, and that will be bad for you in the long run.
To help you out, we’ve prepared a simple home loan application checklist, so you can be sure you have everything you need. In sum, you need information covering the following areas:
- Personal identification
- Details on your income
- Your assets and liabilities
- Monthly expenses
- Details on your target property
- Other documents
Personal ID
There are 2 types of personal ID that can be accepted for your home loan application: primary and secondary. The former includes photo IDs such as your passport, driver’s licence, or a proof of age card or state-issued photo card. Secondary includes things like birth certificate, Medicare card, a citizenship document, tax assessment notices, and recent utility bills.
Income
The more proof of income you can show the lender, the better your chances of not just being approved but also securing the best-possible terms. For those who are employed full-time, you’ll need recent payslips or another proof or summary of recent income from your employer. For self-employed folks, you can use your ABN ATO tax assessments from up to the last 2 years.
Other income you can show: rental income, overseas income and government income like pensions or annuities. Any evidence you have for these in the form of signed or properly marked documents will be of use.
Assets and Liabilities
Your assets include things that you own outright, such as other properties, cars, financial savings, investments, and so on. Wherever you have significant sums of money tied up in things that you own, it’s an asset. Your liabilities are areas where you owe money, such as credit card or store card debts, a financed car, statements on personal loans, and so on. Think of this like a balance sheet.
Summary of Monthly Expenses
Your monthly expenses include everything you spend money on currently: rent, schooling, utility bills, transportation, utilities, child support, insurance, and so on. These are not debt or liability areas like credit card debts, but rather things you consume on a month by month basis.
Property Details
The mortgage lenders need to know everything about the property you are buying. They especially need to see a signed contract of sale to prove that you have already taken the first step to purchase it and that this mortgage and the money it brings is for the purposes of a property sale.
If you’re building a new property, you’ll also need to show that you have approval and permission from your local council, as well as a contract with a builder.
Other
The above covers documentation needed under normal circumstances, but certain professionals have additional options, sometimes for special loans targeting their profession. To get these, they have to provide additional documentation and information.
- Medical professionals – proof of current profession and registration with recognised authority.
- Engineers – proof of current professional and proof of membership in recognised association in the engineering field.
- Lawyers – proof of income exceeding $150,000 each year (NSW, VIC, QLD, ACT) or $120,000 a year (SA, WA, TAS, the NT), proof of membership of appropriate bar association.
- IT Pros – proof of employment for at least 12 months with the same employer, 15% deposit, sufficient funds to cover added taxes and expenses, clean credit history.
