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Checklist of documents needed for a home loan application

Checklist of documents needed for a home loan application

Buying a house is a major milestone in a person’s life. However, the excitement of owning a house can quickly turn sour if you apply for a home loan without being prepared for the road ahead as you could struggle to get everything in order at the last minute. 

So, once you’ve decided to apply for a home loan, the first step is to start gathering the necessary documents that will be needed throughout the application process. While the information required differs from lender to lender, there are specific documents that are usually required while applying for a home loan. 

Based on the information sourced from different Australian lenders, we have provided an overview of the documents needed for your home loan application. While your lender may require additional documents, you could at least be prepared with the basics beforehand, which can save you a considerable amount of time. 

Which identification documents are required? 

Lenders are legally required to confirm that you are who you claim to be. Hence, you must provide at least one primary and two secondary identification documents, as listed below: 

Primary documents: 

  • Passport 
  • Australian driver license 
  • Australian citizenship certificate
  • Australian certificate of identity

Secondary documents:

  • Medicare card
  • Federal Concession cards
  • Australian Seniors Card
  • Australian birth certificate
  • Australian citizenship certificate

If you already have an account with the lender, you might not have to provide any documents for identification. 

Which documents are required to assess your income?

Income information is crucial for lenders as this enables them to assess your ability to repay the loan without putting your finances under any undue stress. The types of documents you’ll need for this stage of assessment will depend on your type of employment: 

  • If you’re a salaried employee, you’ll need to provide a bank statement that highlights the last two salary payments and payslips from three months before the application. You will also need a letter from your employer confirming your employment details. 
  • If you’re self-employed, you’ll need to provide your accountant’s information and financial statements from the past two years. 
  • If you’re receiving superannuation, you’ll need to provide a super fund statement or a bank statement that displays your current income on average. 
  • If you’re receiving a government income, you can provide the Centrelink statement or your current bank statement that displays the government payments. 
  • If you receive income by renting properties, you’ll need to provide the lender with a current bank statement. You’ll also need to provide your current lease arrangement and a letter from your real estate agent and property manager. 
  • If you earn your income from investments, you’ll need to provide your shareholding certificate(s) or a current dividend statement notice.

Which documents are required to assess your financial position?

One of the key factors your lender will analyse while assessing your application is your overall financial position. To do this, the lender will most likely ask for information related to your assets, including superannuation, shares, vehicles, etc. Additionally, the lenders will also gather information about your debts, like credit cards, bills, loans and Afterpay purchases. 

The lender might also ask for documents that highlight your monthly living expenses, including transport, groceries, entertainment, clothing, TV, phone, education and childcare, etc. Getting this information is important for the lender as it gives them a monthly breakdown of your expenses, allowing them to ensure that you have enough funds to cover your mortgage repayments without any hassles. 

All of these factors will also be considered while determining the interest rate and the amount the lender is willing to offer if they accept your application. Some lenders may require more documents, especially if your application isn’t in the average bracket, for example, applying for a home loan with a bad credit score. Hence, before applying for a loan, it’s recommended to carefully browse through your options and select a lender that provides an exact list of documents needed for your home loan application and is willing to offer a reasonable interest rate.

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