April 20, 2020
When you are applying for a home loan, there are certain things you’ll need to bring to your first mortgage appointment.
How long does a mortgage application appointment take?
You should generally set aside at least an hour to an hour and a half for your initial home loan application appointment. That said, every person and every home loan is different. For instance, if you have a lot of questions you may find you need more time.
At this meeting, we will ask you questions about your current and future plans and you’ll have to provide some formal proof of your finances. You’ll need to be ready for this by bringing the correct information and documents.
Below we’ve set out what you need to bring to your mortgage appointment.
1) Identification
For home loan applications, the acceptable forms of ID are set out under the Australian government’s 100-point ID check. Under this scheme, different documents are assigned different points depending on how formal they are – for instance, a current passport or birth certificate is worth 70 points and a driver’s licence 40 points. You need to provide enough documentation to reach 100 points.
2) Information on your income
A lender will want to satisfy itself that you’re receiving a regular income. The documents you need to prove this will vary, depending on whether you’re a permanent or casual employee, or self-employed.
While different lenders may ask for slightly different information, we’ve set out some of the common requirements below.
If you’re a permanent full-time or part-time employee
You’ll usually need to provide at least your most recent two payslips showing your year-to-date pay for at least three months. You may also be asked to provide a bank statement showing that money entering your account, or in some circumstances a tax return.
If you’re a contractor or casual employee
You may be asked to provide up to six months’ of payslips, as well as bank statements showing your money entering your account and an ATO notice of assessment. You may also need to provide a letter from your employer confirming your employment status and pay.
If you’re self-employed
You’ll usually be asked to provide the financials for the past two years including tax returns and profit and loss statements. In some circumstances, you may also be asked for additional information depending on the structure of your business.
Other income
If you receive income through other sources that you want to include as part of your loan application assessment, you’ll need to provide proof of this too. For instance, if you own an investment property, you should be prepared to bring a signed lease agreement and evidence of the rental income such as your rental statements. If you receive money from share dividends, trust payments or a government pension, you should also bring similar evidence.
3) Proof of your expenses and debts
All lenders will want to confirm your living expenses information by seeing concrete evidence of where your money goes. This can include details of any ongoing loan repayments as well as other major expenses such as childcare or education. It can even include such things as your Netflix subscription or your gym membership. To verify your expenses and debts, you will need to provide bank and credit card statements for the past six months. You should also be prepared to bring information showing any outstanding loan balances.
4) Details of any savings and other assets
You should always bring your most recent statement showing money in your savings accounts or term deposits. If you’re borrowing more than 85% or 90% of the property’s value, lenders will generally want to see evidence of “genuine savings”, which means you may have to provide at least three months’ of statements showing your contributions. You should also bring proof of ownership of any shares or other assets.
5) Your insurance policies
Because lenders are interested in protecting their loan, many will want to know they will be repaid if the worst happens and you become ill or die. This means you should bring evidence of any insurance policies you hold including life, TPD or trauma and income protection insurance. Some lenders will also want to see that you have home and contents insurance. Lenders will require that you hold building insurance on the property they are taking as security once the loan settles.
6) Details of your current home loan
If you’re refinancing, you may be asked to provide details of your current home loan. This includes home loan statements covering the previous three to six months, the current balance of your loan and details of any payout costs.
7) The contract for sale
Finally, if you are using the loan to buy a property, a lender will require a signed copy of the contract for sale. If you’re building your own home, they will ask you to provide a builder’s contract and approved building plans.
