Do you need to fill out a statutory declaration as part of the home loan application process? Here’s what you’ll need to do.
When you apply for a home loan, you need to supply a range of information so the lender can determine your borrowing capacity and decide whether or not you can be approved for a loan. From information about your income and your savings, to details of your assets and liabilities, the lender needs to form a full picture of your financial situation.
As part of the process of supplying the information and evidence, you may need to supply a statutory declaration. This is an important legal document that allows you to declare something to be true.
If you need to fill out a statutory declaration (also called a stat dec) as part of your home loan application, read on to find out how to complete one correctly.
What is a statutory declaration?
According to the Australian Attorney-General’s Department, a statutory declaration is “a written statement that allows a person to declare something to be true”. For example, you may prepare a stat dec to declare that you are currently renting a particular property or that the deposit for your home loan was given to you as a gift by your parents.
The stat dec will need to be witnessed by an authorised person and can only contain true statements. If you intentionally make a false statement in a statutory declaration you could be charged with an offence, and the maximum penalty is a four-year prison sentence.
Why might I need to supply a statutory declaration during the home loan application process?
Here are some of the common reasons why you might need a statutory declaration when applying for a home loan:
- To explain defaults, judgments or missed payments included in your credit file
- To declare that your home loan deposit was given to you as a gift by a relative and not as a loan that will need to be repaid
- To declare the name by which you are known, if it varies from the name on your birth certificate
- To declare the purpose for which you intend to use the money you borrow
- To declare that you are currently renting a property or that you are currently living with your parents and not paying any rent
- To declare something about your finances, such as the fact that you’ve closed a particular credit card
Most Australian lenders have a cautious approach when it comes to home loan lending, so a stat dec can help them decide whether or not you pose too much risk as a borrower. A statutory declaration is a way of confirming something that you are unable to prove with other evidence, and it will hopefully help the lender view your mortgage application in a more positive light.
What are the requirements of a statutory declaration?
OK, so your lender has requested a statutory declaration. What do you need to do now? First of all, it’s worth pointing out that states and territories have their own laws and requirements regarding statutory declarations, so you’ll need to contact the justice department or Attorney-General’s department in your state to find out the exact requirements where you live.
There are some common mistakes you should try to avoid when filling out a stat dec:
- Not including a date on the declaration
- Only having one home loan applicant included on the declaration instead of both
- Forgetting to include the full names of those signing the declaration
- Using wording in the declaration that is different to the wording requested by your lender
- Failing to get the statutory declaration signed by an authorised witness
- Failing to provide the original stat dec to your lender
Check to confirm that you’ve met all the necessary requirements before presenting the statutory declaration to your lender.
Tips for filling out a statutory declaration
- Templates. In some cases, your lender may provide you with a statutory declaration template. If not, you should be able to find a template to use on the website of your state or territory’s justice department.
- Authorised witnesses. Under the Statutory Declarations Act 1959, a stat dec can be signed in the presence of a wide range of authorised witnesses. Check with your lender or with the justice department in your state about who is authorised to sign your declaration, such as a Justice of the Peace, a teacher or a medical practitioner.
- Details required. The name, address and contact details of the person(s) making the declaration need to be included.
- Double-check. There are serious penalties for making a false statement in a stat dec, and any errors or omissions in your declaration could slow down the borrowing process. Make sure to double-check all the details of your declaration before submitting it to a lender.