Submitted by: Kimberley Ash
A mortgage loan most commonly referred to as a home loan in Australia is probably one of the biggest financial risk youll undertake in your life. What exactly do you need to start of the process and raise your chances of the lender approving your application?
When you set out to submit your application, there are several things that a lender looks out for to ensure that you are capable to meeting your monthly repayments. Read on to learn more about lender requirements and the mortgage application process.
How Does A Lender Check My Mortgage Affordability?
Before you can be considered, a lender has to check to make sure you are able to afford the amount you are looking to borrow. Checking your affordability is a complex process that takes into account a lot of things. Your lender not only adds up all your household income which includes your basic salary and any other income from part time work such as freelancing or other commissions or bonuses, but also takes into account your expenses. The expenses include your regular household bills and other outgoings from your account such as loans you may be repaying. All this is to ensure that after all the expenses are deducted; you are still able to comfortably pay your monthly repayments.
Lenders also run a credit report with credit agencies to have a better understanding of your financial history and help them determine how much of a risk it is to lend to you.
In addition, lenders also do a stress test to gauge if youll still be in a position to meet your monthly target were the interest rates to rise or in event you retire or your contract ends.
How To Prepare And Make Sure Your Application Stands Out
To increase chances of your application being accepted, you need to get a hold of your credit report and make sure everything is correct. Depending on which state you are in, you can get your credit report from one of these four credit agencies; Veda, Dun and Bradstreet, Tasmanian Collection Service and Experian.
With your credit report at hand, you can now start collecting these other documents that are required for the mortgage application:
Proof of identity. This can be a passport, Australian drivers license or Australian proof of age card.
Your pay slip
Bank statement for the past three months
Employment contract or a letter from your employer that details your current wage base wage and PAYG payment summary or tax return.
If you are self-employed, youll need to provide a most recent ATO (Australian Tax Office) Notice of assessment and most recent business and personal tax returns including financial statements.
Proof of identity. This can be a passport, Australian drivers license or Australian proof of age card.
Your pay slip
Bank statement for the past three months
Employment contract or a letter from your employer that details your current wage base wage and PAYG payment summary or tax return.
If you are self-employed, youll need to provide a most recent ATO (Australian Tax Office) Notice of assessment and most recent business and personal tax returns including financial statements.
About the Author: Kimberley A is an expert property adviser and professional from North Sydney, Australia. The author loves to share her experience on the topics like mortgage brokers in Sydney, types of home loans, big lenders, how to get loans approved, etc. so that latest property and home loan updates can be made available for the buyers before making any deal. For more information, You can visit –
TheFinanceSite.com
.au
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