If you’re in the market to purchase your first home, second home or even your investment property, consider spending some time to view the lists below, to use as a checklist on collating the right list of documents in obtaining a Preliminary Loan Approval. These below checklists will assist to expedite the loan process to give you a clear picture of the loan process and more importantly your borrow power or what lender consider Your Borrowing Capacity.

A home loan submission has very specific documentation requirements, therefore if you spend sometimes run through these requirements the whole process is a whole lot less of a drama.

First Up would be Loan Affordability:

If you are currently paying rent you would most possibly be able to afford to pay the loan repayments.

You need to calculate what you could possibly afford to make towards a loan in loan repayments once you set aside the funds to cover your living expenses. Additionally, you will need to factor in, if interest rates were to rise by 3% on top of what your rate is now, would you still be able to maintain the loan repayments.

If you find you have no surplus funds once you undergo this exercise, then you may need to look for a lower pricing property to purchase.

What Savings or Deposit do I need?

The days are long gone when you didn’t need a deposit as lenders would lend you 110% on the value of the purchase property.

Now, you must have a minimum of a 5% deposit. For a first home buyer, up to a $500,000 purchase, you may only need 6% deposit, 5% for the deposit as the lender will provide the 95% loan amount & the 1% to cover the government transfer fees and associated fees but no Stamp Duty is payable for first home buyers. If a first home buyer was to purchase above $500,000 the deposit amount would need to increase as will the Stamp Duty, therefore, you will need the 5% deposit for the lender and additional funds to cover the associated costs.

For a second home buyer, you will require a minimum of 5% plus another approx. 3% in funds to cover the Government Stamp duties and associated cost.

To read more on How Much Deposit Do I Need, follow this link.

The Paper Shuffle:

The documentation stage can be a paper shuffle experience as you look to find all the right type of documents to prepare for the loan submission.

If you follow by ticking off the checklist below you will breeze through the collation of documents to get you on your way for the Pre-approval stage.

Loan Pre-Approval Stage

The Pre-Approval initially can be done over the phone, from which, you will know the maximum amount you can borrow based on your available loan serviceable income.

If you know your annual gross income and have an idea of your liabilities (Credit Expenses), we are able to work out Your Borrowing Capacity based on your taxable income or use any of our other online calculators found on the same page as the How much can I borrow link. The Borrowing Calculator will give you a list of our Top 10 Lenders maximum loan amounts, however, please note, these are only indicative for now only to be used as a guide.