Preparation is key if you wish to apply for a home loan. The lender would require various kinds of information before they even approve your application. They primarily do this in order to establish that you have the ability to pay your mortgage.
It is also essential to be prepared due to the lengthy process involved. When your lender denies your application, you might have to go the entire process all over again. Therefore, having every requirement ready helps you save time as well.
Each lender has different requirements. Thus, you need to determine what these are before you apply. You could use the guide below to find out the most common requirements lenders need:
- Your employment-related documents. You need to show proof of income when you are applying for a home loan. Therefore, the lender would need documents related to your work, including your employment history, income tax returns, records of your salary, and a letter from your employer indicating how long you have been working for the company. If you are self-employed, you might need to submit your income tax return for the last three years.
- Proof of your identity. Naturally, you also need to establish your identity when applying for a home loan. Documents your lender might require include your passport, your current address as well as your previous ones.
- Credit and savings. To establish your ability to pay the loan and that you are a low-risk borrower, your lender might also require documents related to your credit and savings history. These include bank statements and credit card statements with your credit limits.
- Other documents/information. There may also be other documents that you need to submit aside from the ones previously mentioned. If you are a buying a home for the first time, you might need to submit your application for a First Home Owner Grant. Information on your assets might also be required.
Again, you need to confirm the specific requirements of your lenders to increase your chances of approval. Once you know what these are, make sure that you have these requirements ready before you meet with your lender.
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