14 Jun 2019

It’s fair to say that banks are scrutinising loan applications more closely in the current lending climate, with income, expenditure and conduct of commitments being placed under the microscope with a lot more vigour than we’ve previously seen. Part of this elevated scrutiny now requires comprehensive documentation being submitted to support new applications.

To ensure a smooth assessment process it’s necessary to ensure all required documents are available right out of the gate. The following is a guide to what you should be looking to compile as a minimum starting point.

IDENTIFICATION:

  • A least one form of photo ID such as Driver’s License or Passport
  • Birth Certificate if the photo ID requirement cannot be satisfied along with secondary ID such as
  • Medicare Card or Centrelink Card or Rates Notice / Utility Bill

INCOME:

  • Latest 2 Pay slips for PAYG or a Letter from employer stating employment terms.
  • Latest 2 Tax Returns and ATO Notices for Self Employed applicants
  • Confirmation of Centrelink Benefits
  • Rental Income Statement

DEPOSIT:

  • At least 3 consecutive months of savings history
  • Receipt of Deposit Paid on purchase property
  • Proof of sale proceeds from previous property sale being used as deposit

LIABILITIES:

  • At least 3 months statements for home loans and 6 months for refinances
  • At least 3 months statements for credit cards and personal loans
  • Confirmation of outstanding HELP debt

PROPERTY PURCHASE:

  • Copy of the Contract of Sale
  • Copy of Building Plans for Construction Loans

OTHER EXPENSES

  • Rental expense if this will be continuing after settlement
  • Private School fees or any other Education expenses
  • Child support payment confirmation.

Further to the above items, general living expenses are now keenly scrutinised by banks via careful reconciliation of what is declared by the applicant against expenditure noted on bank statements. We therefore suggest potential borrowers take the time to realistically assess what their monthly outgoings are to ensure what you declare aligns with the documentation provided otherwise questions will be raised and potential delays will occur.

Whilst the above checklist is a great starting point there is every possibility that additional items will be requested by the bank based on your unique circumstance so be prepared to produce more information as required.

Considering how comprehensive a loan application now needs to be, it’s clear that using a mortgage broker is the overwhelmingly preferred option for the client. Now more than ever a loan submission needs to be done right the first time. If you need your application done right or would like some further information, contact the team at Blackburne Mortgage Broking.

 

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