Your lender will require documentation to support your mortgage application. Collation of this early in your home buying search will ease the application process while helping you to buy with confidence. The following outlines the basic requirements:
• ID check
Usually you’ll be required to provide copies of your driver’s licence, birth certificate and/or passport, so be sure to track down these items and have them at hand. You may also need to provide a copy of your citizenship certificate, Medicare card, utilities bills, rates notices or a tax assessment notice (less than 12 months old) to support your identity documentation.
• Detail assets
Proof of savings, managed funds and other investments are all a key consideration in a lender’s evaluation of your ability to service a loan. Your assets include your current bank balance, any savings accounts, term deposits, shares and superannuation as well as proof of any other tangible assets.
• Prove your income
Lenders will require some income details so they can judge your capacity to repay your home loan debt, so organise copies of your employee group certificate, payslips, tax return and any other regular incomes sources. If you are an irregular income earner, such as a self-employed or contract worker, then you must be able to self-certify your income – which may include an accountant’s letter amongst other documentation.
• Reveal your liabilities
Lenders will need information about your current liabilities and financial obligations in order to assess your current credit worthiness. This could include HECS statements, three months’ worth of credit card statements, repayment records and balances for all other loan types, overdraft account statements and lease agreements.
• Establish your living expenses
You’ll be asked by your lender about your monthly outgoings so rather than plucking figures from the air, take time to work out exactly what your monthly commitments are. Think about considerations like rental repayments, council, water, electricity, gas bills and weekly travel expenses. Even items, like gym memberships, should be factored in.
• Other documents and records
If you have gone down the path of using a guarantor, for example someone who will be responsible for your repayments should you default, it is also necessary for you to provide documentation regarding your guarantor’s identity, assets and liabilities. If a gift of funds is involved you’ll also need documentation of this.