With the excitement of a new home comes the abundance of paperwork. Before getting that tick of approval, you’ll need to provide your lender with a few documents so they can confirm you meet their home loan requirements and are ready for home ownership. Check out what you need before you apply to speed up your home loan application and get you into your new home sooner.
Tip: All the documents you provide will need to be the original or a certified copy.
Home loan applications 101
Before we get into the nitty-gritty of exactly what you need to supply your lender, you’ll want to make sure you can answer ‘yes’ to some basic questions . These are questions that People’s Choice will ask:
- Are you aged 18 years or older?
- Are you an Australian citizen, or otherwise a permanent resident in Australia?
- Applying for a home loan will trigger a credit check, which may have impacts to your credit score — are you ok with that?
If you answered yes to all of those, you’ve already passed the first hurdle. Success!
If you didn’t answer yes to all of them, you might have trouble applying for a home loan. There are some things that lenders can’t budge on, for example, the minimum age for a home loan in Australia is 18 years old.
Now that we’ve got that out of the way, let’s get into some specific information and documents your lender is probably going to need from you.
Who you are
You’ll firstly need to start off by providing evidence of who you are. This includes your driver’s licence, passport or birth certificate. Depending on how many items of identification you have (e.g. if you don’t own a driver’s licence or passport), you might also need to bring in your Medicare card or a utility bill as further evidence. If you’re applying with your partner or a friend, make sure both of you come prepared with the required documents.
What you earn
Your lender will also need to know how much you earn to ensure you can afford to make your repayments each month. You’ll need to provide your two most recent payslips or your current Centrelink income statement. You will also need to provide your group certificate or a copy of your tax return for the last financial year. Don’t forget to supply your last three bank statements to prove your regular income and that you can save.
If you’re self employed you’ll need your accountant’s details, the last two year’s financial statements and your tax return. You might also be earning money from other revenues such as a rental property. Make sure to provide details and evidence of this such as bank statements showing the money coming in or your lease agreement (if you own a rental).
What you own
Do you own a car, boat or a fancy yacht (we wish)? Do you dabble in the share market? Anything you own will need to be disclosed to your lender including details of their value or balances. This gives your lender a full picture of your financial position.
What you owe
If you own a credit card, have other loans or even if you use Afterpay, you’ll need to disclose outstanding balances, minimum monthly repayments as well as your card limits. Your lender will also perform a credit check to help them decide if they will lend you money. If you have a history of paying your bills late or are owing a lot of money these may be seen as red flags to your lender. If this is the case, don’t stress, you can improve your credit score over time by making some changes to your financial habits.
What type of loan
If you’re purchasing a house, supply your solicitor’s or conveyancer’s details as well as copy of your contract of sale (if possible). If you’re building a property, bring a copy of the signed builder’s contract as well as a copy of the home warranty. You’ll also need a building permit or council approved plans.
Depending on your financial position there may be other documents required; this is a guide to get you started. Chat to a Home Loan Adviser to find out if there are any additional documents you might need.