What the lenders want to see and not want to see?

What lenders want to see Things that could work against you

(or that you would be asked more questions about) A stable income



Lenders will want to see that your income is stable and will continue. A realistic budget



Lenders need to see that you're able to repay the loan while still being able to 'have a life'. A stable home



Lenders want to see that you don't move around a lot. A good credit history A history of bounced cheques

Convictions for stealing, fraud, or dishonesty

A record of bad debts or court judgements

A previous bankruptcy.

Calculations

There are a number of calculations that lenders make to see whether you're eligible for a home loan. Lenders use either a 'debt servicing ratio' or a 'net servicing ratio' to work out whether you can afford to repay a home loan. These are simple calculations that you can do yourself. You'll need to know how much your debt repayments are each month, the price of the house you want to buy, the applicable interest rate, and your monthly income (gross and net).

As part of their decision-making process, lenders check to see if you have repaid loans and hire purchase accounts you have had in the past (your credit history). By looking at your credit history, lenders can find out how well you have managed your debts with other companies. This helps them to decide how risky lending you money might be.

Types of home loan approval

Pre-approval

Before you start looking for a house, you can come to us to do a pre-approved home loan. If your home loan application is approved, you will know how much the lender will lend you before you begin looking for a house. Armed with this knowledge, you can ask real estate agents to show you houses up to this price.

Approval when you find a home

You can choose to wait until you find a house before you apply for a home loan. You will need to see your lender to fill in an application form and make sure that the house meets with their approval. On the sale and purchase agreement, you will need to make sure that you include conditions about finding finance and getting market valuation reports.

Your lawyer will help you with this.

Never sign any papers to buy a house without asking your lawyer to check the contracts first. You need to make sure that everything is right.

What we need

There are some documents you will need to speed up your mortgage application.

Identification

Most lenders require photo ID and signature verification. Your driver's licence or passport is the easiest way to satisfy this requirement.

Income evidence

If a salary and wage earner, payslips (last three). Letter of employment confirming gross income, particularly to show proof of regular overtime, bonuses and commission. If self employed, your last two years of financial accounts and tax summaries.

Bank statements

hese are the transactional accounts that show your everyday income and out-goings.

Sale & purchase agreement (signed copy)

Copy of this if you have negotiated a property to purchase.

Your deposit

Proof of any saved deposit, six months worth of bank statements or investment certificates.

Lawyer

The name of your lawyer.

Registered valuation

We can advise if this will be necessary and can recommend a valuer if you wish.