Checklist: All the documents you'll need for a pre-approved mortgage

Wanting to buy a new home? Before you start house hunting, it’s a good idea to apply for a pre-approved mortgage so you know how much you’ll be able to borrow.

The pre-approval process allows the bank to run a background check on you to determine whether you will have the resources and the ability to pay back your mortgage.

The bank is going to need a lot of information about you, your income, your employment history, and how you manage your money. Be prepared for personal questions about your financial circumstances and recent transactions. You’ll probably ask yourself - do they really need all of this information? The answer is yes. The bank isn’t going to lend a whole heap of money to just anyone - they need to know if you’re going to be a reliable debtor.

With this in mind, here are some of the documents you’ll need to gather for a pre-approval:

Identification

Make sure you provide valid proof of identification. A driver’s license, passport or something similar.

Proof of Employment & Income

To get a pre-approved mortgage you’re going to need to prove you are steadily and consistently employed. They want to ensure you’ve got regular income, so that repayments on your loan will not put you under financial pressure.

If you’re self-employed, you’ll have to prove you’re financially stable by showing documentations of your business and/or freelance activities despite not being an ordinary employee.

If you’re employed you’ll need:

• 
  
  • Payslips (3 most recent)
  
  
  • 2 years confirmation of any bonuses you receive
  
  

If you’re self-employed

• 
  
  • Pay Slips/Invoices (for at least three months)
  
  
  • Tax Returns (no longer than 18 months)
  
  

Details of your expenses:

Your lender will need to get an idea of what your expenses are to help understand your ability to make repayments.

These include:

• 
  
  • Household costs
  
  
  • Child support payments
  
  
  • Financial commitments and debt payments
  
  
  • Any other outgoings
  
  

Proof of current debts

Be honest when declaring your debt. They’ll need to see how much you owe and when you expect to finish paying your debts.

This can be documentation and billing statements for:

• 
  
  • Credit cards
  
  
  • Loans
  
  
  • Hire purchases
  
  
  • Store cards
  
  
  • Overdrafts
  
  

Proof of assets

Give your bank information on any assets you may have. For example, if you own real estate properties, you can provide a council rate as your evidence of ownership.

A completed application form

This may be an obvious one, but it’s worth saying. Make sure to double check your application form and sign it!

Once you’ve got all your documents together, pass it on your bank or lender who will then do a review. Provided that everything goes well, your pre-approved mortgage will be sorted, and you can start looking out for your next home!

Wanting to get an idea on how much you should borrow when buying a home? Check out our article.

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