Although it’s hard to predict how long it will take to get your home loan approved (because each application is unique and every bank has different requirements), the most common reasons for delay are lack of preparation/disclosure of information by the client and a lender’s turnaround time to assessment. Despite this a good Finance Broker will be able to help you take all the necessary steps to ensure a lightning fast home loan approval. So why not contact us today via our online form or on 02 8412 0009 to get the ball rolling?
There’s also some key information and tips you should know to ensure you’re home loan approval ready…
Lenders use the five C’s of credit when assessing your ability to pay back a mortgage: –
Credit history – Your lender will want to make sure when you’ve borrowed money in the past, you’ve paid it back. You must maintain a squeaky-clean record if you want your loan approved quickly
Capital – Lenders want to ensure you have accumulated assets i.e. property, motor vehicle, home contents
Collateral – This is the property you will use as a security. Your current property (for a refinance) or a new property (for a purchase)
Capacity – Capacity is your ability to service your debt and it’s measured by your current income against any existing debts plus the proposed loan repayments. For instance, your repayments shouldn’t exceed 30 – 35% of your gross income and all your debts shouldn’t exceed 40 – 45% of your gross income. Your mortgage broker can explain your borrowing capacity in more detail
Character – It’s a combination of all four previous C’s as well as subjective and objective assessments, such as how long have you been in your job? How long you have lived in your current residence? Are you an Australian citizen?
The documents that you need to provide will vary depending on your situation and the lender, however you should expect to have to provide the following: –
PROOF OF IDENTITY
– Most lenders require 100 points of ID. Your broker will need to cite your Driver’s License and Passport. They will also need to photocopy these documents and some providers require them to be certified
– Marriage certificate may need to be provided if there has been a name change
PAYG
– Copies of 2 of your most recent consecutive payslips
– Copy of your most recent PAYG Summary (Group Certificate)
– Details of your last 2 years of employment
SELF EMPLOYED
– Copies of your last 2 years Income Tax returns (Both personal and company returns & Tax Assessment Notices)
– Copies of your last 2 years Balance Sheets and Profit & Loss Statements
OTHER SOURCES OF INCOME (rental income)
– Recent rental statement from managing real estate agent or current Lease Agreement
– Letter from Real Estate Agent with a market appraisal for potential rent
ASSET/SAVING HISTORY
– A copy of your last 3 months bank statements (for all personal accounts)
– Latest copy of all Credit Card Statements
LIVING EXPENSES
– Details of all your expenses, including HECS Debt, school fees, phone bills, rent or any other expense
NEW PROPERTY PURCHASE
– Front page of the Contract of Sale (signed Vendor and Purchaser)
– Copy of deposit receipt (if already paid)
REFINANCE
– Copy of loan statements for the last 6 months for all loans being refinanced
– Copy of latest council rates notice for each property (showing no arrears)
*Please note – These are the main documents needed for home loan approvals, however every application differs and final supporting document requirements are dependent on the individual(s) and the chosen lender.
