Last week we looked at an overview of the home loan process. This week we will have a closer look at the documentation that will be required. Please note the documentation required to support a home loan application will vary depending on the lender, this is just an overview and not a comprehensive list.
Before you can start your home loan application you will need to have a few documents on hand to prove your identity, income, assets and liabilities.
This post will be split into two parts, with this first part looking at the documentation required to support your identity and income. The second part of this post will look at the assets and liabilities.
Identity
It is preferrable that you have two of the following:
- passport;
- driver’s licence; and
- photo identification, such as a university identification card or proof of age card.
If you don’t have two of these, you can also provide one, plus a birth certificate, Medicare card, citizenship certificate or similar documentation. Ensure that you have your marriage certificate handy (if your name is different on other ID’s).
Income
Your income may come from a variety of sources, we will cover off the most common sources of income and the type of documentation that will be required. You will find that some documentation may be acceptable for different types of income e.g. PAYG and Bonus Income.
PAYG
If you are employed on a full-time basis, this will be fairly easy
- 2 latest payslips (for casual, overtime and work related allowances, these must show YTD income history of 3 months or more); or
- Letter from employer less than 6 weeks old or employment contract which shows employer name and ABN (if applicable), employee name, and current base wage; or
- Tax Return or PAYG Payment Summary (Group Certificate) less than 15 months old; or
- If you have a transaction account with the lender they may accept 3 months of account statements showing salary credits.
Bonus Income
Letter(s) from employer or acceptable electronic payslips detailing the bonus amounts received over the past 2 financial years.
Self-Employed
- Full financials2 most recent years’ Personal and Business Income Tax Returns, the most recent being no more than 24 months old, and most recent corresponding Notice of Assessment; or
- If your Tax Returns/Notices of Assessment are greater than 24 months old, provide them along with either one of the following:
- internal management accounts supported by Business Activity Statements (BAS) for the past 12 consecutive months verified by the Australian Taxation Office (ATO); or
- current draft or final financial statements prepared by an accountant
Note: Business financials are to be accountant prepared, actual (not draft or extracts) and in full (i.e. trading, profit and loss, balance sheet, etc.)
Rental Income
- Current lease agreement, statement or letter from the managing agent less than 6 weeks old (excluding holiday rental); or
- Transaction statements showing rental deposits for the most recent 3 months (for holiday rental this should be for 12 months); or
- Most recent Tax Return less than 15 months old where rental properties are owned by the applicant.
Centrelink Income
- Letter from Centrelink no more than 6 weeks old detailing income/benefit.
- 3 months Bank statements confirming regular receipt.
Post Retirement Income
In certain circumstances the lender will require information about your post retirement income. The information required will include:
- the most recent superannuation statement less than 3 months old which includes the amount invested and the indexed pension or annuity being received/ to be received in retirement.
Next week we will continue looking at the supporting doucmentation needed for your assets and liabilities.