Organising loan paperwork

Organising loan paperwork
Jonathan ChancellorFebruary 6, 2021

 

The process of applying for a home loan will flow more smoothly if you have your paperwork in order from the start.

The lender will need proof of your identity such as a passport or driver’s licence and birth certificate or citizenship certificate. You may also have to supply documents such as a utility bill or recent notice issued by the Australian Tax Office.

You’ll be asked for details about your income and financial position as this will determine how much you can borrow. 

INCOME

If you’re paid a salary or wage, proof of income might include:

  • Recent pay slips
  • Your employment contract or a letter from your employerconfirming your salary and how long you’ve worked there
  • A bank statement or transaction history showing your salary going into a bank account
  • A tax return prepared by a tax agent
  • An ATO Notice of Assessment

If you’re self-employed, you may need:

  • Recent personal and business income tax returns and ATO assessment notices
  • About a year’s worth of Business Activity Statements 
  • Financial statements prepared by an accountant

FINANCIAL POSITION

You may be asked to demonstrate proof of your savings by presenting bank account transaction summaries. 

If someone has given you money towards your purchase you may need them to supply a letter saying the funds are an unconditional gift or outlining the repayment terms and conditions if it’s a personal loan.

The lender may ask for details of any other savings or assets you have, such as term deposits, share investments, property or motor vehicles.

Also, be prepared to supply statements for credit or store cards and any other loans you may have.

INSURANCE

If you have home and/or contents insurance, or any life insurance policies you may need to supply these details as well. 

THE PROPERTY

It’s important to have finance pre-approved before the exchange of contracts. When it comes to completing the formal home loan application, you’ll need to supply the lender with the contract of sale.

If you’re building, you’ll need a fixed price building contract and council approved building plans or specifications, or a building permit.

Quick tip: It's important to be open and honest about your finances from the start as this will avoid disappointment down the track, so choose a broker or loan adviser who you feel comfortable forming a relationship with as you will be sharing personal information with them.

 

TO FIND OUT HOW RAMS CAN HELP EASE YOU THROUGH THE PROCESS, GET IN TOUCH WITH YOUR LOCAL RAMS HOME LOAN EXPERT OR DROP IN FOR YOUR FREE FIRST HOME BUYERS’ GUIDE.

For more great property advice and tips on buying your first home from RAMS subscribe to The Great Australian Dream property series.

For your free Property Observer eBook from RAMS, 12 tips for first-time buyerscovering everything you need to know when it comes to purchasing property, click here.

Disclaimer: Information in this material is general and does not take into account your objectives, financial situation or needs and you should consider whether it is appropriate for you. You should also obtain independent professional advice relevant to your financial circumstances.

Jonathan Chancellor

Jonathan Chancellor is one of Australia's most respected property journalists, having been at the top of the game since the early 1980s. Jonathan co-founded the property industry website Property Observer and has written for national and international publications.

Editor's Picks