If you’re like most people you’d love to own your own home. For most of us that means establishing a mortgage and borrowing money.
When it comes to the time to apply you’ll probably end up speaking to a mortgage broker or some other financial expert and we highly recommend that. They’ll tell you that you need to gather together a bunch of information and assist you to present it to a range of lenders that can help you finance your purchase. They’ll also help you to calculate the costs of purchasing including those hidden costs like stamp duty, legal fees, loan establishment fees and so forth. It will be a very useful exercise indeed.
Information you’ll need when you apply for a mortgage
For most loans though we can give you a head start. Look at compiling the following information even prior to speaking with a broker and you’ll be well prepared.
- Current and previous addresses
- Details of your current assets – car, motorbike, boat, collectibles etc.
- Your income and outgoings
- Three (in most cases) recent payslips
- Tax returns
- If you’re self employed then a minimum of two years worth of financials
- A letter of appointment (stating the terms of your employment, i.e. permanent, contract, etc.)
- Identification documents totalling 100 points (i.e. licence, passport, etc.)
- Credit card statements if you have any
- Proof of saving (bank statements are generally pretty good here)
- Details of the property you’re looking to purchase (a sales contract will provide this)
- If you’ve been given a gift to help with the purchase then you may require a statutory declaration noting that it does not have to be repaid
- A rental income assessment if it is an investment property
And here’s a couple of other tips
If you have credit cards then the lender will look at the limits of the cards. A month or so before you apply for a loan drop the limit. The lower the better. This will look good for you in terms of a risk assessment from the bank.
If this is your first home and you intend to live in it then don’t forget about any government assistance that you may be eligible for. This will include things like the First Home Owners Grant and possibly stamp duty concessions depending on where you live.
One last thing
You may have noticed that we suggested knowing what your assets are worth. Consider using lockr to help you work this out and save yourself a heap of time. Not only is this useful for your financial decisions but it will also help you to secure your financial future by protecting your assets with the correct amount of insurance.
Good luck with the house hunting!