Key Takeaways
- Applying for a home loan in Australia requires compiling a comprehensive set of documents to demonstrate your identity, your capacity to repay a loan and your recent conduct on any existing loans or other forms of credit like credit cards
- The primary documents needed include identification, employment and income verification, asset and liability statements, property-related paperwork, 6 months of statements for all loans and forms of credit. Additional information can sometimes be required.
- Being organised and providing complete documentation can speed up the assessment and loan approval process and increase your chances of securing your home loan in the time frame you need.
Home ownership is a significant milestone for many Australians, and obtaining a home loan is usually the first crucial step in realising this dream. However, navigating the application process the first time can be daunting, particularly for first-time buyers who might not know what to expect. One of the most critical aspects of the home loan application is assembling the required documents. This comprehensive checklist aims to guide you through the necessary paperwork, to help you ensure a smooth and efficient process.
Identification Documents
Lenders require proof of identity and visa status, if applicable, to verify your personal information and address and match them to your credit file. The following documents are typically requested:
- Australian Driver’s License or Passport
- Medicare Card
- Birth Certificate
Some lenders will request 100 points of ID. Check What Makes Up 100 Points of ID.
Employment and Income Verification
Lenders need to assess your capacity to repay a loan by verifying your employment status and income sources. Lenders will normally do this using an assessment rate, which is a rate that’s higher than the actual rate on their home loan products. Standards and assessment rates for lenders in Australia are set by The Australian Prudential Regulation Authority (APRA).
Depending on your circumstances you could be asked for:
- Payslips (typically the last 3-6 payslips)
- Employment Contract or Letter of Employment
- Employer letters for recent salary increases
- Group Certificate
- Tax Returns (for self-employed individuals or those with additional income sources or commission)
- Rental Income Statements (if applicable)
Asset and Liability Statements
Lenders will evaluate your overall financial position by examining your assets and liabilities. You may need to provide:
- Bank Statements (typically the last 6 months)
- Investment Statements (e.g. shares, mutual funds)
- Loan Statements (e.g., car loans, personal loans, credit cards)
- Evidence of Savings and Deposit
- Details of Other Assets (e.g., vehicles, properties, collectibles of value)
If using a mortgage broker or loan expert like Dark Horse Financial to help you get the best home loan for your situation, they will compile this information into an asset and liability statement or statement of position as part of their process.
Property-Related Documents
If you have already identified the property you wish to purchase, you will need to provide the following documents:
- Contract of Sale or Purchase
- Pest and Building Inspection Reports (if required)
- Strata Report (for units or apartments)
- Rental Appraisal (for investment properties)
- Rates notices for any existing properties
Additional Documents
Depending on your individual circumstances, lenders may request additional documentation, such as:
- Divorce or Separation Documents (if applicable)
- Child Support or Spousal Maintenance Statements
- Bankruptcy or Debt Agreement Discharge Documents
- Gift Letters (if receiving financial assistance from family or friends) including a stat dec confirming a gift is non-refundable.
Tips for a Smooth Application Process
- Gather all documents well in advance to avoid delays.
- Ensure all documents are up-to-date and accurate.
- Make sure all identification documents have not expired.
- Provide clear and legible copies of documents when requested, including copies of both the front and back sides of your drivers licence.
- Be prepared to explain any gaps or irregularities in your documentation.
- Consider using a document checklist or folder to stay organised.
Talk to Experts About Your Home Loan Application
By being proactive and compiling the necessary documents, you will create the potential for your loan to be assessed in the fastest possible time frame and with the least amount of queries. Remember, lenders want to ensure you can comfortably repay the loan, so providing complete and accurate information is crucial. Reach out to us to talk to a loan expert for your home loan.
