You are excited to refinance or buy your own home. Finally, you can nail paintings without fear. It is within walking distance from your best mate. It is even got your lucky number on the letterbox.
So why is applying for a home loan so daunting?
A lot is involved in getting it right, and there are no guarantees. Our finance broking specialists can help you with your home loan application checklist to get organised – and the more prepared you are, the more likely it is you will get a thumbs-up from your preferred lender.
1. Make sure you have got your paperwork.
At least three recent consecutive payslips;
A recent copy of your latest PAYG Summary & Notice of Assessment from the ATO;
Recent three months bank statements showing other income, like Centrelink payments;
Your accountant’s details, if you are self-employed; and
Evidence you have saved for your deposit (usually three months of savings).
2. Prove that it is you.
Oh yes, more paperwork. You will need at least 100 points of ID when you apply. A passport is a good start, plus a combination of your driver’s licence, bank cards, Medicare card or birth certificate.
3. Figure out your financial position.
A lender wants to know that you can afford to make your repayments. Being eligible for a home loan is not just about how much you earn – lenders will also take into account other assets and how much you spend.
Gather your paperwork (are you sensing a theme?) for:
Any other loans or debts you have, like car finance or personal loans;
Assets in your name; and
An estimate of your living expenses, including how much you are spending on those good corn chips.
4. Check out your credit report.
Most lenders want to see a clean credit report before they will approve your finance. You can order your Credit File report from a credit agency at a cost, so you are aware of your position before you apply for a home loan. Most of the time when you approached a finance broker, he/she will be able to obtain a copy of your credit file from a relevant credit agency as part of your financial assessment.
5. Clean up your wallet.
When it comes to credit cards, lenders will ask you to state the total limit on each card ¬– that is the amount of credit available to you to use. Even if you do not owe anything, your lender will probably still consider the total limit to be a liability. You can boost your application by paying off and cancelling unused cards before you apply.
6. Know what you want to apply for.
ASA Mortgage Brokers will present you with a minimum of three lenders and its products to choose from with a recommended product to suit your needs. You will be asked to nominate the home loan and loan term you want. Before you do that, it is highly recommended to review the products and the product suitability. A finance broker can help you understand the different features, rates and fees, so you can get the right product first go.
7. Brag about your new home.
This is the exciting part. The loan application form will ask about the security for your loan – that is your new home. It will all start to feel real now. Supply details in writing, including the signed contract of sale. If you are building, you will need any council permits and your fixed-price builder's contract.
8. Has your legal eagle lined up?
As you reach the end of your application, you will be asked to provide details of your solicitor or conveyancer. Having your legal professional lined up before you are ready to apply for a loan will speed up the paperwork. If you are refinancing your home loan dollar to dollar or with debt consolidation, then you would not need to get engaged with a conveyance.
9. Pay attention to detail.
There are a lot of requirements for a home loan. Giving yourself the best chance of success means getting it all spot on. Every detail on your loan application form should match up and cross-reference precisely. Make a checklist for your checklist, if you have to. Consider colour-coding it. Give yourself a gold star sticker for each one you cross off.
10. Or … choose a simpler option.
Want to skip to the end? Contact the local independent finance broker like ASA Mortgage Brokers and we will fill out the application for you and tick the boxes of every step of the process. Too easy.
Applying for a home loan does not have to be difficult. Buy a fancy ring-binder folder, make copies of everything you submit, and take it one step at a time. ASA Mortgage Brokers use digital platforms in the process which means less paperwork but you will have all the documents sent to you as a digital copy to keep for your records. You will be in your new home before you know it.
This article is prepared based on general information. It does not take into account individual financial objectives or needs and is not financial product advice. Terms, conditions, fees apply. Applications are subject to credit approval. The original context was quoted from the ME Bank Shared blog.