What paperwork do I need to prepare before going to the lenders?

One of the more time consuming parts of getting a mortgage and becoming an investment property owner is the paperwork.

When heading to a lender for a mortgage, there are a number of things you need to be sure to have – particularly if you’re self-employed or have an unusual working arrangement. For new investors, this can be daunting.

Identification

This is straightforward, but don’t forget it. 100 points of identification is the best way to go. A driver’s licence and passport or other form of photo identification will go well, however if you only have one of these items then you can also consider bringing along a birth certificate, Medicare card or utility bill.

Income confirmation

As mentioned above, this can be trickier if you are in a non-traditional mode of employment. Your most recent payslip is a good option, otherwise proof of the income being deposited into your account can also sometimes be accepted. For many loans, you will be required to show a “year to date” income for a portion of time. This is often seen on play slips, however tax returns, ATO notices of assessment, PAYG summaries, a letter from your employer or an employment contract can all be options. Overtime hours can be considered as income, however depending on regularity, you may be required to seek advice on how the lender prefers to receive this information.

For those who are self-employed, documentation may be required. A one year individual tax return and a one year business tax return, profit and loss statement and a balance sheet may be necessary.

You may also receive other income, such as from shareholdings. You will be required to bring tax returns and statements to prove this income.

Liabilities and assets

In order to determine your financial situation, a lender will also want to see proof of your assets and liabilities. If your assets are savings, then you will need to provide bank account details, however shareholdings or motor vehicles can also be taken into account. It is worth asking the lender ahead of time about how to prove your assets. If you already own your home, you will be required to provide information about your current mortgage and insurances.

It could also be a good idea to be prepared with paperwork relating to insurances and personal cover.

For help getting started in property investment, speak with a RAMS home loan specialist and pick up your free RAMS Investor Pack.

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Disclaimer: Information in this material in 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.

The taxation positions described are general statements and should only be used as a guide. It does not constitute tax advice and is based on current tax laws and their interpretation.

RAMS Financial Group Pty Limited does not endorse or assume any responsibility for the advice, content or services provided by Property Observer or any other third party referred to in this material.

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