What documents do I need to apply for a home loan?

Rates and Fees verified correct on December 6th, 2016

Prepare for your application and get a faster response

If you’re trying to get a home loan, you can speed up the process by having everything organised before you apply. Along with your application, you’ll need to make sure you have all your supporting documents in order.

The information you need to provide will depend on your circumstances and requirements may vary from lender to lender. This guide will help you put together your supporting documents and get your home loan approved as quickly as possible.

What documents do I need to apply for a home loan graphic

Identification

Any lender you go through will have identification requirements. This means you’ll have to provide 100 points of ID in the form of either two primary identification documents or one primary and one or more secondary identification document. The tables below outline what documents are considered primary and secondary options, and how many points they are worth.

Primary documents

Birth certificate70 points
Name change certificate70 points
Current passport70 points
Expired passport that was not cancelled and was current within the preceding two years70 points
Citizenship certificates70 points
Diplomatic documents and official documents issued to refugees70 points

Secondary documents

Driver’s licence40 points
State or Territory issued photo ID card40 points
Photo ID issued by tertiary education institute40 points
Photo card issued by banking institution where you have been a customer for at least 12 months40 points
Public service ID card including your photo and signature40 points
Licence or permit issued by State, Territory or Commonwealth government, such as a boating licence40 points
Letter confirming your identity from referee you’ve known for at least 12 months40 points
Mortgage documents35 points
Council rates notice35 points
Credit card statement25 points
Foreign driver’s licence25 points
Medicare card25 points
Credit card (must have name and signature)25 points
Utility bill with name and current address25 points
EFTPOS card (must have name and signature)25 points

If you can’t produce 100 points of identification using the documents above, talk to your lender or mortgage broker as there might be other forms of documentation you can use. There are also some scenarios where you may not need to provide identification documents. For example, if you’re applying for a home loan from a lender with which you already have a transaction account, personal loan, savings account or other products, you will have already gone through the identification process and may not have to do it again.

Income

You can prove your income in different ways depending on your employment circumstances. If you’re a PAYG employee, the process is relatively straightforward. If you’re a casual worker or are self-employed, however, you might need a different set of documents. Likewise, if you have income from multiple sources you’ll need to be able to document all of them.

PAYG employees

As a PAYG employee, you’ll have to provide a recent payslip (in most cases no older than two months) stating your year-to-date (YTD) income. Some lenders might ask for multiple payslips, so check each individual lender’s requirements. If you can’t track down your recent payslips, most lenders will also accept the past three months’ worth of bank statements showing your salary going into your account. Some lenders will also accept an employment contract and letter from your employer stating your current base wage, or a tax return that’s prepared by a tax agent.

Casual workers

If you’re a casual worker, you’ll need to provide last financial year’s notice of assessment from the ATO.

Self-employed

Self-employed borrowers generally need to seek out low documentation, or low doc, loans. This term can be somewhat misleading, as the amount of documentation you need is not generally less than with traditional home loans. You just need to produce a different kind of documentation.

Instead of PAYG statements, you can provide your lender with your most recent notice of assessment from the ATO. Lenders will also want to see tax agent prepared business and individual tax returns from the last financial year. Some lenders might also accept a letter from your accountant or a Business Activity Statement (BAS).

Multiple incomes

If you have multiple forms of income, you’ll have to provide documentation for each source. The type of documentation required will depend upon the type of income.

Rental income

Rental income can either be current income or, if you’re buying an investment property, proposed rental income. If you want existing rental income to be considered on your loan application, you’ll need a current lease agreement, a current bank statement showing identifiable rent payments for the past three months. If you’re listing proposed rental income, you’ll need a statement from a property manager or real estate agent giving details about the property and its proposed rental income.

Shares

Shares can also be included as income in your loan application. You’ll need your shareholding statement, a letter from your financial planner, a recent bank statement showing direct credits from your investment, or your most recent tax return.

Centrelink income

Some Centrelink benefits can be considered as income on a loan application. For a full rundown of the benefits you might be able to list as income, check out our guide. To document Centrelink income, you’ll need a current Centrelink statement or a recent bank statement clearly showing direct credits from Centrelink into your account.

Assets and liabilities

A lender will not only want to see your income, but also your assets and liabilities in order to assess your full financial position. This will give them a better idea of whether or not you’re a credit risk. Put simply, assets are anything you own, while liabilities are anything you owe.

Assets

Assets could be other properties, vehicles, term deposits or high interest savings accounts. You’ll need to provide documentation, such as your vehicle registration or any relevant bank statements, for each asset you list on your application.

Details about your assets are important because lenders want to see that you have enough money for a deposit and have a history of genuine savings. You’ll also need to provide your potential lender with bank statements if your savings account is with a different financial institution. When it comes to a deposit, most banks require proof of six months’ worth of genuine savings, so it’s wise to bring along at least your last six bank statements.

Liabilities

Liabilities are any outstanding debts or ongoing payments for products such as personal loans, vehicle loans, credit cards or store cards. You’ll need to bring statements that show the current outstanding balance for each liability. For credit cards and store cards, you can provide your most recent statement. For loans, you should provide your last three statements.

Miscellaneous documents

Here are a few other documents you might want to provide depending on your situation.

  • If you’re an eligible first home buyer, it will help to have your First Home Owner Grant application completed. To see if you might be eligible, check out our guide.
  • If you’re applying for a home loan with a guarantor, your guarantor will also have to provide all documentation for their identification, income, assets and liabilities.
  • If you already have insurance on the property, you’ll want a copy of your insurance policy.
  • If you’ve already had a valuation done on the property, have the valuation report at hand.

While documentation requirements vary from lender to lender, being prepared will make your home loan application process smoother in the long run.

Image: Shutterstock

Adam Smith

Adam has more than five years of experience writing about the Australian home loan market.

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