At Greater Bank, we want to equip you with the tools you need to be on top of your finances. It’s no secret that home loans can leave many scratching their heads. To help prepare anyone applying for a home loan, whether they are a Greater Bank customer or not, we have developed this simple to follow, step-by-step guide.
So, let’s get started!
Choosing a lender
Firstly, you want to choose the right lender for you, and this can be challenging. The Australian Security and Investment Commission (ASIC) recommends asking each lender you’re considering for a key fact sheet *, so that you can methodically compare features, interest rates and fees. The most important things to consider are the repayment amounts, the fees and charges and the total amount to be repaid over the life of the loan.
If you would like to apply for a home loan with Greater Bank, you can find out more about our application process here.
If you are undecided, this article will give you a step-by-step guide of the home loan application process.
Next, speak with your lender
Upon the selection of your lender you will need to make an appointment for an application interview in order to begin the process of applying for your home loan. Applying for your home loan with your lender before putting an offer on a property is ideal as there are various benefits to gaining pre-approval.
What will I need to apply for a home loan?
For lenders to get a clear picture of your financial situation they will require supporting documentation.
By having your necessary documentation at the ready, you can speed up your home loan application process. This can vary from lender to lender, but in most cases lenders do require the same basic documentation to complete the home loan application process | Greater Bank
- Proof of identity – this would require a number of forms of identification showing your full name, (including middle name,) where applicable.
- Proof of income - your last two pay slips and any evidence of rental or dividend income received. Your evidence must support that you are holding stable employment. Some lenders may accept a copy of your bank statement that receives your pay or a letter from your employer that outlines your employment.
- Self-employed - if you work for yourself, lenders may need copies of your business and personal tax returns from the previous two years, along with your Notice of Assessment from the A.T.O. They may even ask for your accountant’s details to make collecting your information easier.
- Benefits – you may be required to submit Centrelink statements. This is particularly relevant for those who receive Family Tax Benefit/Child Support Income.
- Proof of Assets – whether it’s shares, other properties, automobiles or even if you own a small island, your lender will require proof of all of your assets. This evidence could be anything and everything from rates notices and dividend statements for owned property or rego papers for vehicles, etc.
- Savings & Deposit – lenders will ask for statements from all of your savings accounts, as well as proof of your deposit, if your deposit isn't coming from your existing savings. You will be required to save a minimum of 5% of the purchase price as a deposit, but ideally you would want a minimum of a 20% deposit to avoid paying Lender’s mortgage insurance.
Be aware, if you have received a First Home Owners Grant, you will also need to submit evidence of this to complete your application. Also, this process may vary depending on the type of home loan you are applying for, for example, a guarantor home loan will require information from your guarantor.
After receiving pre-approval on your home loan
How exciting! You can now go on the hunt for your dream property. Once found, you can confidently make an offer knowing your full financial situation. You can then push for full approval of your home loan. You will then be required to sign the final loan documents and confirm settlements on the property. After this, the funds will be transferred, and you will have your new home sorted!
Applying for a home loan is a rite of passage for many Australians; one that many people are not overly enthusiastic about. However, by being prepared, you can make the process smoother and hopefully uncomplicated. We at Greater Bank are dedicated to providing our customers with the best service and support possible. To find out more about our home loan options, please click here.