Knowing when you are ready for a home loan can be challenging; you may think you are ready when you’re not, or you may think you are not ready when you are.  We have put together a list of our suggestions on how to know if it is the right time-

These may sound obvious to some, but in finance obvious is important.

You are comfortable getting by each week with your rent, bills and other expenses.

• If you are paying your bills on time without any thought and putting money into savings. You will most likely be comfortable with a mortgage. At Derwent Finance we often see people paying more in rent than what they would be paying off their home loan

A Deposit-

• In an ideal world, we urge clients to have a 20% deposit for a home loan (so you a borrowing 80% of the mortgage from the bank).
• If you have a higher deposit, GREAT if you have lower than 20% it may be possible to be accepted for a loan. However, this does depend on your circumstances, and you may be required to pay for lenders mortgage insurance.
• Contact our brokers on 6108 9177 to discuss your options.

No Debt-

• The less debt bad debt you have, the better (bad debt is debt that will more than likely decrease in vail and or not bring an income to you. Such as an everyday car, credit card a phone bill and even by ‘by now pay later no interest repayments’ such as Zip Pay and AfterPay). Once these are paid off, you will have additional money that you can use to pay off your home loan.

A steady job that you are confident in knowing you will be there in five, ten years from now

• The last thing you want is not being able to make repayments on your loan because your contract at work has finished and not renewed. Being causal at work and losing hours; Before you apply for a loan, you want to be confident that you will never have a problem in making repayments.

• If these circumstances do happen to you and you fail to make repayments, you may seriously struggle in the future if you apply for another loan.

You have all of the required paperwork.

• It is almost impossible to get a home loan without proving the required paperwork. Before you think about applying for a home loan ensure you have the following available to give to your mortgage broker;
• It may seem like a lot, but the majority are 100% necessary, if you do not have all of the following, please let our team at Derwent Finance know.

Every loan-

Identification- We must sight the original identification, please bring along the following:

Current Drivers licence OR Proof of Age Card AND

Current Passport OR Birth Certificate

IF you have had a name change, please bring Marital certificate OR Certificate of Poof of Name Change.

 

Income Verification- This is all needed to prove your income, what is required changes on how you are employed.

 

If you get to pay as you go (PAYG)-

Your TWO LASTEST computer-generated pay slips LESS THAN ONE MONTH OLD; Stating your name, employers name and ABN, current salary/wage and year-to-date income AND;

Most recent PAYG summary (Tax certificate)

 

If both of the above are not available, we may consider one of the following:

Employment contract

Employer letter on company letterhead stating annual income, position, basis and long term employment

Three months of bank statements showing regular electronic payments with your employers’ name showing.

 

If you are Self-employed-

Most RECENT TWO YEARS full tax returns (business and personal, including business financial statements)

AND most recent TWO YEARS Tax assessment notices

Copy of your ABN- must be CURRENT for at least TWO YEARS

 

If you have a Rental Income-

Proof of RENTAL INCOME on investment properties by Rental statements, current lease/tenancy agreement or rental appraisal (where the property purchased, or not previously rented)

 

Loan Type- again, what you need to bring, depends on your loan type, read below carefully.

 

If you are purchasing an existing property-

A FULL copy of purchase contract signed and dated by BOTH the purchaser and the vendor.

 

If you are building-

A FULL copy of signed and dated Land and Building contract AND

Building plan AND specifications

 

If you are refinancing a current property-

Last SIX MONTHS statements of all loans that are getting refinanced

Rates notice

 

Other Statements

Last THREE MONTHS of statements for any cards OR personal loans you are consolidating

Last ONE MONTH of statements for your current everyday banking account

Last ONE MONTH of statements for any other loans you have

 

ALL statements MUST have your Name, Account Number, running balance and bank logo- you can use an older original statement combined with internet transactions to bring it up-to-date. PDF download is best, otherwise screenshots.

 

Evidence of source of deposit

If LVR is 85%+

THREE MONTHS of bank statements showing FUNDS to complete the purchase (including a minimum of 5% genuine savings)

If LVR is <85%

CURRENT bank statement showing sufficient funds to complete

So do you think you are ready to get a home loan?

Do you have any questions?

 

Get in contact with our Derwent Finance Team:

(03) 6108 2110 or [email protected]