What Documents Do You Need for a Home Loan Application?
Buying a home has long been the great Australian dream, but for most Aussies, that dream can only become a reality with considerable financial assistance. Most people don’t have enough cash in the bank to purchase a home outright, especially if it’s their first home.
Fortunately, when it comes to home loans, Australia offers up many options. Home loan lenders seem to be everywhere, from the big banks right through to the private lending sector.
While many lenders are all vying for business in a competitive market, prospective homebuyers who want to secure a loan still need to meet the lender’s criteria before getting approved for finance.
The VA loan near me mortgage is one such option for veterans, active military personnel, and surviving spouses that offers competitive interest rates and flexible terms. So if you’re thinking about applying for a home loan, what documents do you need to have at the ready?
If you’ve been asking yourself the following questions…
- What documents do I need for a home loan?
- What do I need to apply for a mortgage?
…you’ve come to the right place, as we’ll be answering those questions in this article. Let’s take a look at some of the documents you’ll need to secure a home loan and why you need them.
You Must Prove Your Identity
No matter what lender you choose, whether it’s a bank, building society, or one of the numerous other Aussie lenders that offer home loans, the lender needs to be able to verify your identity. Without this verification, they’ll be taking a huge financial risk of lending money to an effectively unknown person. No lender will take that risk, so one of the first things you’ll need to be able to do is prove that you are you.
Let’s now list some documents you can use to prove your identity:
- Passport;
- Driver’s license;
- Birth certificate;
- Citizenship certificate;
- Medicare card.
Primary identification documents usually include a photo, along with a non-photo ID such as a birth certificate. Your lender may also ask for some secondary documents to prove your identity, including a recent utility bill with your current address, your latest tax assessment from the ATO, and so on.
Being able to prove your identity is generally the first step in the documentation process.
The Documents Required To Demonstrate Your Income
To qualify for a home loan, which is a major financial commitment, you’ll also need to be able to demonstrate that you have the financial means to pay the mortgage month after month and year after year. So, after proving your identity, you’ll then be required to provide proof of income.
If you’re a wage earner, your lender will usually want to see your most recent payslips and probably a bank statement as well that shows financial details of at least several months.
Your lender will most likely contact your employer to verify your employment and ask questions about how long you’ve been working for the business or company.
For self-employed people, you’ll need to provide the financial details of your business or have your accountant submit these details to the lender directly. Banks and other lenders generally want to see the business’s financial status covering the last two years, on average, when it comes to business owners. Your latest tax assessment from the ATO may also be required if you’re self-employed.
Declaring Expenses
While providing documentation is not normally required to complete this step of the home loan application process, you will be required to complete details regarding your monthly expenditure. This will include things like monthly food expenses, travel, school fees, clothing, and personal care, entertainment expenses, household utilities, phone and internet expenses, and so forth.
This is a necessary step, so lenders can determine how much of your income you’ll have available to repay your home loan.
What You Own
Having assets can certainly help in your quest to secure a home loan. Assets can include other property, cars, boats, or any items of significant value. Providing documents that prove ownership of these items will go a long way towards helping you get that home loan.
In Conclusion
Whichever lender you decide to go with, be sure to view their home loan application checklist before you start to fill out an application. If you can provide all the required documentation, it’s a major step towards achieving the great Australian dream.
