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Check Affordability

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Loan Submission

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Pre-Approval

Preliminary Loan Approval.

The easiest way to know how much you can borrow is to get Preliminary Loan Approved also known as a Home Loan Pre-Approval.

What is a Home Loan Pre-Approval and How Can I Obtain It?

A Home Loan Pre-Approval, also referred to as a Preliminary Loan Approval, is a crucial first step in the home buying process. It’s a written commitment from a lender to provide you with a loan up to a specified amount, subject to certain conditions being met i.e., verifying the summitted assessment documents and for the lender to obtain a property valuation once you have entered into a property purchase contract.

To obtain a Pre-Approval, you need to provide the lender with a range of information and documents, which will enable them to assess your financial situation and determine your borrowing capacity. This includes details about your income, expenses, assets, and liabilities.

To ensure that you have everything you need, it’s essential to compile a list of the required documents ahead of time. Further below on the page we list the main documents any lender would request.

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 taking the time to gather all the necessary information and documents upfront can make the Pre-Approval loans process much smoother and faster. It also gives you a clear understanding of your borrowing capacity, so you can begin searching for a property that fits within your budget.

How to Calculate Loan Affordability for a Mortgage Application?

First up, we highly recommend that you start by calculating your current living expenses and how much you can afford to pay towards loan repayments. If you are currently renting, this will give you a good idea of what you can afford.

Once you have a clear idea of your monthly budget, you can start to factor in potential loan repayments. It’s important to make sure that you have enough surplus funds after paying for living expenses to comfortably cover loan repayments.

However, it’s also important to consider potential future interest rate rises. we recommend adding 3% to your current interest rate and assessing whether you would still be able to afford your loan repayments, it interest rate were to rise above the proposed 3% buffer. If you find that you would have no surplus funds after factoring in interest rate rises, you may need to consider a lower priced property to purchase.

Remember, taking on a mortgage is a long-term commitment, so it’s crucial to ensure that you can comfortably afford the loan repayments and have a financial buffer in case of unexpected expenses. By carefully assessing your loan affordability, you can make informed decisions and avoid financial stress in the future.

Understanding Mortgage Deposit Requirements for Home Buyers in 2023.

Applying for a mortgage can be an overwhelming process, especially if you’re unsure about the savings or deposit you’ll need. In the past, lenders used to offer up to 110% of the property value, allowing you to avoid putting down a deposit. However, things have changed, and a minimum deposit of 5% is now required.

For first home buyers, the deposit requirements may vary depending on the purchase price of the property. If the purchase price is up to $500,000, you’ll need a 6% deposit, which consists of a 5% deposit provided by the lender and 1 to 2% to cover government transfer fees and other associated costs. The good news is that first home buyers may be exempt from paying stamp duty up to a certain value, but if the purchase price is over that threshold, you’ll need to increase the deposit amount to cover the additional stamp duty and associated costs.

As for second home buyers, the minimum deposit requirement is also 5%, but you’ll need additional funds ranging from 3 to 4% to cover various expenses, including government stamp duties, lenders mortgage insurance premium, solicitors or conveyancers‘ fees, building and pest inspection fees, and other associated costs.

It’s important to note that these percentages are estimates, and the actual amount you’ll need may vary based on your lender’s requirements and the purchase price of the property in your state. Therefore, it’s crucial to speak with a mortgage broker or us at Neomoney who can guide you through the process and help you determine the exact amount you’ll need for your mortgage application.

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

How to Get Pre-Approved For a Mortgage Loan?

The pre-approval stage is an essential step in the mortgage application process. To get pre-approved for a mortgage loan, you can start the process by contacting us over the phone. During this initial consultation, we will review your financial situation and determine the maximum amount you can borrow based on your available loan serviceable income. This process will also give you a better idea of what you can realistically afford.

If you have your annual gross income information available and an estimate of your liabilities or credit expenses, we can calculate your borrowing capacity based on your taxable income. This information will help us to determine how much money you can borrow and what type of loan product might be the best fit for you.

We also have a range of online calculators available on our website, including a borrowing calculator that can provide you with a list of our top 10 lenders’ maximum loan amounts. These calculators are a helpful tool to give you an idea of what you might be able to borrow. However, it’s important to keep in mind that these amounts are only indicative and should only be used as a guide.

Let’s Get Started.

The Pre-Approval process takes a matter of a few steps.

Step One ~

To find a suitable loan product. 

If you are unsure about the type of loan product you need, don’t worry, we’re here to assist you with the process. Our Fact Find Questionnaire can help you narrow down the types of loan products that may suit your requirements. By answering a few questions, we can guide you towards the loan products that best match your needs. Alternatively, if you already have an idea of the type of loan product you require, we can help you proceed with that as well.

Follow this link to the Loan Products page for further details.

Step Two ~

Required Documents for Lender.

Once we know the lender and product required, we need a list of documents to obtain the Pre-Approval. Each lender has their preferred method and type of documents, however the majority of lenders require all of the documents per list below;

Step Three ~

Documentation Stage to Obtain a Pre-Approval.

 

Get Pre-Approved for Your Dream Home or Investment Property Today.

Take the first step towards owning your dream home or investment property by getting pre-approved today. Don’t let financing hold you back from owning your dream home. Fast-track your homeownership goals with a pre-approval. Fill out the form below and our experienced team will provide you with a personalized solution that helps you achieve your dream of homeownership.

Preliminary Approval Documents

Here we break down in more details the preferred types of documents for an application as a First Home Buyer, Home Buyer, Consolidating Loans, Refinancing Loans and Investment Loans for and Investment purchase for a Applicant as a PAYG, Self-Employed applicant and the required documents if you wish to refinance a mortgage;

Applicant Types

First Home Buyer (FHB)

Documentations for First Home Buyer:

Note: These are required for each applicant

  • Copy of Drivers Licences & copy of Passports or Birth Certificate (these are required for the 100 points of ID’s)
  • Copy of last 2 Current pay slips (Not more than 30 days old)
  • Copy of last 3 months Bank statement to show saving pattern of the 5% genuine savings
  • Copy of current (last year’s) ATO Assessment Notice or Employers group certificate
  • The First Home Owners Grant (FHOG) application form for your own state can be found at these Useful State Grant list of Australian State Revenue Offices. You will need to take your original ID’s plus copies of these ID’s to be certified by a Solicitor or Justice Of The Peace, with the following wording;
    • “I certify that I have sighted the original documents and this is a true copy of it”.
    • This certification must be on each document (not required on each page) and
    • Have the Certifiers Name,
    • Title (position held),
    • Registration number (where applicable) and
    • Be signed and
    • Dated.
  • If using rental payments made over 6th month, a copy of Rental Management Letter from agent (For Non-Genuine 5% savings) further details on Rental Payments can be found on the link.

Documentations for First Home Buyer:

Note: These are required for each applicant

  • Copy of Drivers Licences & copy of Passports or Birth Certificate (these are required for ID’s for Directors).
  • Copy of last 2 most recent years’ Personal Income Tax returns. (the most recent being no more than 24 months old).
  • Copy of last 2 most recent years’ Business (or Company) Income Tax returns. (the most recent being no more than 24 months old).
  • Copy of last 2 years of ATO Notice of Assessment.
  • Copy of last 6 months Bank statement to show saving pattern & 5% genuine savings.
  • The First Home Owners Grant (FHOG) application form for your own state can be found at these Useful State Grant list of Australian State Revenue Offices. You will need to take your original ID’s plus copies of these ID’s to be certified by a Solicitor or Justice Of The Peace, with the following wording;
    • “I certify that I have sighted the original documents and this is a true copy of it”.
    • This certification must be on each document (not required on each page) and
    • Have the Certifiers Name,
    • Title (position held),
    • Registration number (where applicable) and
    • Be signed and
    • Dated.
  • If using rental payments made over 6th month, a copy of Rental Management Letter from agent (For Non-Genuine 5% savings) further details on Rental Payments can be found on the link.

Home Buyer

Documentations for Non First Home Buyer:

Note: These are required for each applicant

  • Copy of Drivers Licences & copy of Passports or Birth Certificate (these are required for the 100 points of ID’s).
  • Copy of last 2 Current pay slips (Not more than 30 days old).
  • Copy of current (last year’s) ATO Assessment Notice or Employers group certificate.
  • Copy of last 3 months Bank statement to show saving pattern of the 5% genuine savings, Or
  • Savings of more than 10% deposit, a copy of last month Bank statement to show Funds to Complete the next home purchase.

Documentation for Non-First Home Buyer:

Note: These are required for each applicant

  • Copy of Drivers Licences & copy of Passports or Birth Certificate (these are required for ID’s for Directors).
  • Copy of last 2 most recent years’ Personal Income Tax returns. (the most recent being no more than 24 months old).
  • Copy of last 2 most recent years’ Business (or Company) Income Tax returns. (the most recent being no more than 24 months old).
  • Copy of last 2 years ATO Notice of Assessment.
  • Copy of last 3 months Bank statement to show saving pattern of the 5% genuine savings, Or
  • Savings of more than 10% deposit, a copy of last month Bank statement to show Funds to Complete the next home purchase.

Consolidation Loans

Documentations for Consolidation Loans:

Note: These are required for each applicant

  • Copy of Drivers Licences & copy of Passports or Birth Certificate (these are required for ID’s)
  • Copy of last 2 Current pay slips (Not more than 30 days old)
  • Copy of last year’s ATO Assessment Notice or Employers group certificate.
  • Copy of current Rates Notice.
  • Rental Income: Copy of a current Tenancy Agreement or Most recent Real Estate or Rental Agent statement showing actual rent (Not more than 30 days old)
  • All loans being consolidated for refinanced, copies of statement covering six months of all home loans, car loan, personal loan.
  • For the Credit Cards being refinanced require last 3 months.

 

For all loans being refinanced these must show acceptable 6 months repayment history with no arrears, defaults, or late payments.

Please Note: All supporting documents and letters, must be dated within 30 days of the date of the signed loan application.

Documentation for Consolidation Loans:

Note: These are required for each applicant

  • Copy of Drivers Licences & copy of Passports or Birth Certificate (these are required for ID’s for Directors).
  • Copy of last 2 most recent years’ Personal Income Tax returns. (the most recent being no more than 24 months old).
  • Copy of last 2 most recent years’ Business (or Company) Income Tax returns. (the most recent being no more than 24 months old).
  • Copy of last year’s ATO Assessment Notice or Employers group certificate.
  • Copy of current Rates Notice.
  • Rental Income: Copy of a current Tenancy Agreement or Most recent Real Estate or Rental Agent statement showing actual rent (Not more than 30 days old).
  • All loans being consolidated for refinanced, copies of statement covering six months of all home loans, car loan, personal loan.
  • For the Credit Cards being refinanced require last 3 months.

 

For all loans being refinanced these must show acceptable 6 months repayment history with no arrears, defaults, or late payments.

Please Note: All supporting documents and letters, must be dated within 30 days of the date of the signed loan application.

Refinance Loans

Documentation for a Loan Refinance:

Note: These are required for each applicant

  • Copy of Drivers Licences & copy of Passports or Birth Certificate (these are required for the 100 points of ID’s).
  • Copy of last 2 Current pay slips (Not more than 30 days old).
  • Copy of current (last year’s) ATO Assessment Notice or Employers group certificate.
  • Copy of last 6 months Bank statement to show loan repayments made on time.
  • Copies of statement covering one month of any car loan, personal loan and Credit Cards to show that you have been on time & making repayments to these loans.
  • Copy of current Rates Notice.
  • Rental Income: Copy of a current Tenancy Agreement or Most recent Real Estate or Rental Agent statement showing actual rent (Not more than 30 days old) Or,
  • For an Investment Purchase, a copy of Rental Appraisal Letter from Real Estate or Rental Agent.

 

Please Note: All supporting documents and letters, must be dated within 30 days of the date of the signed loan application.

Documentation for a Loan Refinance:

Note: These are required for each applicant

  • Copy of Drivers Licences & copy of Passports or Birth Certificate (these are required for ID’s for Directors).
  • Copy of last 2 most recent years’ Personal Income Tax returns. (the most recent being no more than 24 months old).
  • Copy of last 2 most recent years’ Business (or Company) Income Tax returns. (the most recent being no more than 24 months old).
  • Copy of most recent ATO Notice of Assessment.
  • Copy of last 6 months Bank statement to show loan repayments made on time.
  • Copies of statement covering one month of any car loan, personal loan and Credit Cards to show that you have been on time & making repayments to these loans.
  • Copy of current Rates Notice. 
  • Rental Income: Copy of a current Tenancy Agreement or Most recent Real Estate or Rental Agent statement showing actual rent (Not more than 30 days old) Or, 
  • For an Investment Purchase, a copy of Rental Appraisal Letter from Real Estate or Rental Agent.

 

Please Note: All supporting documents and letters, must be dated within 30 days of the date of the signed loan application.

Investment Buyer Loans

Documentation for Investment Loans:

Note: These are required for each applicant

  • Copy of Drivers Licences & copy of Passports or Birth Certificate (these are required for the 100 points of ID’s)
  • Copy of last 2 Current pay slips (Not more than 30 days old)
  • Copy of last 3 months Bank statement to show saving pattern of the 5% genuine savings
  • Copy of current (last year’s) ATO Assessment Notice or Employers group certificate
  • Copy of last 6 months Bank statement to show loan repayments made on time.
  • Copies of statement covering one month of any car loan, personal loan and Credit Cards to show that you have been on time & making repayments to these loans.
  • Copy of current Rates Notice.
  • Rental Income: Copy of a current Tenancy Agreement or Most recent Real Estate or Rental Agent statement showing actual rent (Not more than 30 days old).Or,
  • For an Investment Purchase, a copy of Rental Appraisal Letter from Real Estate or Rental Agent.

 

Please Note: All supporting documents and letters, must be dated within 30 days of the date of the signed loan application.

 

Documentation for Investment Loans:

Note: These are required for each applicant

  • Copy of Drivers Licences & copy of Passports or Birth Certificate (these are required for ID’s for Directors).
  • Copy of last 2 most recent years’ Personal Income Tax returns. (the most recent being no more than 24 months old).
  • Copy of last 2 most recent years’ Business (or Company) Income Tax returns. (the most recent being no more than 24 months old).
  • Copy of most recent ATO Notice of Assessment.
  • Copy of last 6 months Bank statement to show loan repayments made on time.
  • Copies of statement covering one month of any car loan, personal loan and Credit Cards to show that you have been on time & making repayments to these loans.
  • Copy of current Rates Notice.
  • Rental Income: Copy of a current Tenancy Agreement or Most recent Real Estate or Rental Agent statement showing actual rent (Not more than 30 days old). Or,
  • For an Investment Purchase, a copy of Rental Appraisal Letter from Real Estate or Rental Agent.

 

Please Note: All supporting documents and letters, must be dated within 30 days of the date of the signed loan application.