Buying a House – Documents To Provide
You will need to provide supporting documents to your lender when you apply for your loan. This will usually require an in-depth meeting and you should be prepared with all supporting documents that will demonstrate to your lender that you will prove to be a reliable and safe customer to loan a large amount of money to.
Some examples of documents you might need to provide include:
Proof of all your earnings should be included with your application, as well as your latest Australian Tax Office (ATO) Tax Return if you have one. Payslips provide essential information to the banks about your current income situation and must be dated less than four weeks from the date of application. They will need to show your full employee and employer details as well as show your taxable income and net income. Lenders also have their own set minimum amount of time they like to see you have worked with the same employer which is usually three months but can be up to six months. If you are planning to apply for a home loan in the future you should try and stick with the same employer in the months or year(s) leading up to your application. Once you have been approved for your loan you can change jobs and do not need to inform the lender.
When you apply for a home loan the bank will need to see bank statements and transaction histories for all your accounts. This is usually where most people can get into trouble as all your transactions will be scrutinised to determine if you are financially responsible and if you have any lifestyle habits that might affect your reliability.
If you have any spending habits that might appear to be unfavourable to a lender, such as a regular betting habit or money being transferred from one account to another to cover an overdrawn amount, you should clear these up in the months prior to applying for a mortgage. Consider making cash payments to some places if necessary and provide supporting documents like receipts if you’ve taken out a large amount of cash for something like a couch or television. Even better, try not to make any unusual, large or one-off purchases during the period of time that you need to provide bank statements and transaction histories for. Do your best to show your bank you live a financially routine life!
If you have a loan, credit card or store card or any other debt that you are paying for such as finance for a car or boat, you will need to provide statements for each. The statements will need to show that you are regularly paying for them and that you are not in default.
All loan and credit accounts will count as expenses and you should therefore consider paying off as many as you can and closing the accounts before applying for a mortgage.
These are supporting documents that confirm how much you pay in rent and they demonstrate your ability to save money. You can show it to lenders as proof that you’ve been paying rent regularly and on time.. Most lenders will only accept these documents from a Property Manager or Real Estate Agency and not from a landlord.
These would include your New Zealand passport, Australian Drivers Licence, Medicare Card, Marriage Certificates, Bank and Credit Cards. You will need to provide original documents and your lender will copy them on the spot so you can take the originals home with you. Copies will not be accepted.
A letter from your accountant will help clarify any issues that may warrant further explanation and can often allow lenders to bend their guidelines to accept home loans that they would otherwise automatically decline.
Australian lenders are usually pretty hesitant to lend to anyone who has problems with their credit history. Lenders might consider approving a home loan for someone who has had a credit issue provided that there’s a good explanation.
If your parents or someone else are willing to give you the money for a deposit then you will need to provide a statutory declaration from them saying as much. Lenders need to confirm the source of a borrower’s deposit to make sure that they are not borrowing the deposit off credit cards or a personal loan.
Banks do not consider a gift to be the same as a deposit that you have saved yourself. This is because a saved deposit is excellent evidence that you are financially responsible. If you can show a history of saving money, no matter how small the amount, you should absolutely include that as part of your supporting documents. Lenders love seeing a reliable, steady saver. In lieu of providing a regular savings history some lenders might consider a proven rental history of 12 months or more.