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How to Apply for a Home Loan

Render of home

Ready to start shopping for your dream home? The first step is to sort out your finances so you can present them to a lender. 

Being organised for your mortgage application meetings and having all the relevant documents on hand adds to the perception that you are a trustworthy and organised person who can be relied upon to repay their loan. So before you go into your bank or financial institution, go through your filing cabinets and start compiling copies of everything you will need for the application. 

Here are some of the things you will typically need for a home loan application.

  1. Good Credit History
    Ideally lenders prefer their customers to have a clean credit history before they agree to loan large sums of money. This means you should try to minimise your debts – pay off all your credit cards on time, make sure your mobile phone plan is regularly paid and don’t default on any retailer interest free payment plans. 

  2. Proof of Employment and Steady Income
    You will be required to show proof of employment (usually in the form of a letter from your employer to state that you are still working) as well as written proof of your income over the last few years. Pay slips and/or tax returns will usually work. 

  3. Proof of Assets
    If you have other additional assets or financial investments, these will help to increase the likelihood of your mortgage being pre-approved. Bank statements and share portfolio statements provide good proof of these types of assets.  

  4. Proof of Identity Documents
    You will typically be required to provide identification documents such as a passport, birth certificate, driver’s licence, change of name documents or tax file number so the lender can verify your identity. 

  5. Strong Presentation
    Remember that a mortgage application is a request for a very large loan under a very formal and legally binding contract. Give these meetings the right amount of respect by showing up on time, well presented and tidy.