Applying for a home loan doesn’t have to result in you becoming a ball of stress!
Whether it’s your first loan or your fourth loan, a little preparation goes a long way. Familiarising yourself with common home loan requirements and terms, you will instantly feel more confident when applying for your next loan and this can make the process a lot less overwhelming.
Below are some things you can presume will happen when seeking loan approval:
ID check Firstly, you will need photographic proof of identity – a 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 not a bad idea to provide as many of these documents as you have available. It would also be good to have your IDs certified as some lenders may require this.
Income suitability When determining your borrowing capacity, lenders will request documents 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 determining your borrowing capacity, as well as providing lenders with peace of mind, should you find yourself unable to repay the loan. Remember to provide bank statements, any savings accounts and term deposits, as well as details on any current liabilities or financial obligations – 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. 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, get in touch with me today on 1300 100 262 or firstname.lastname@example.org and I will help.