The idea of purchasing a property is daunting enough whether it is your first home or another addition to your investment portfolio. Add in the idea of the mountain of paperwork that goes along with obtaining a home loan and it may seem impossible!
The paperwork lenders require can be significant, and it’s important to provide the correct documentation and completed checklists. Sending your home loan application with missing or incorrect documents can result in your loan application going back and forth without result or even derail the application altogether.
After evaluating the risk involved with repaying a loan, lenders will decide whether or not your application will move forward. While requirements may vary from lender to lender, there are some key criteria commonly used to assess the risk of a client.
The first and foremost area your lender will look into is how much you earn, as well as how stable your earnings are. They want to make sure you can consistently make repayments to your loan and are maintaining continuous employment. Bank statements, payslips, group certificates and tax returns are among the documents required to give evidence of your income.
Although the overall number in your bank account is taken into consideration, lenders look at whether you are capable of saving over the long term. A bank account statement showing regular deposits is an example of a required document. In the lead up to applying for a home loan, think twice about buying your daily coffee or eating out multiple times a week. Instead, deposit this money into your savings account. It is not uncommon for applications to be rejected if a savings history is deemed not to be genuine, for example if the majority of savings have been given as a gift.
To better determine your financial situation, lenders want to see proof of your assets and liabilities, including savings, shareholdings and motor vehicles or an additional form of income. The Hrkac Group team can advise you on the specific paperwork requirements, as each lender can differ.
In order to determine that you have been able to make any previous credit card repayments and bill payments, lenders will look at copies of credit card and personal loan statements. Keep in mind that it’s not only just your credit card, home loan or personal loan repayments they’ll look at, but also any mobile phone and utility bills.
Buying a home is a big step in everyone’s lives and there are certainly many hoops to jump through along the way. The team of Mortgage Brokers at The Hrkac Group aim to make the process of gathering all the necessary paperwork and applying for a home loan as simple and stress free as possible.
Call us today to arrange an appointment.