Getting ready to buy a first home is an exciting time, and it’s possible to streamline the journey by bringing six key pieces of information to your first meeting with an Aussie broker.
There’s a lot to plan for when you’re buying a first home, and there’s plenty you may be unsure about – like what to take to the first meeting with your Aussie broker.
Check out our 6-point list to know what your Aussie broker needs to see to help you get started with your first home.
1. Personal ID
Lenders want to see proof of your identity (no surprises there, after all, they’ll be lending you a decent sum of money), so bring along two forms of ID – your driver’s license, passport or birth certificate, for your Aussie broker to sight.
2. Evidence of genuine savings
A track record of personal saving gives lenders reassurance that you have the financial discipline to manage home loan repayments. You’ll need bank statements showing evidence of genuine savings built up over at least three months.
If you don’t have a lengthy savings history or your deposit doesn’t amount to 20 per cent of your planned purchase budget, you may need to consider other strategies. It may be possible to buy your first home using a smaller deposit with the help of lenders mortgage insurance. Or consider pooling resources to buy with family or team up with friends. Alternatively, you may simply want to save for longer to grow your first home deposit.
3. Proof of income
Your income matters as this will likely be your key source of cash for home loan repayments. This being the case, your broker will need to see evidence of your income including:
• Most recent PAYG payment summary from your employer or tax assessment, and/or
• Two most recent pay slips
• Or, if you’re self-employed, your last two years of personal and business tax returns and Tax Office assessments.
It’s possible to boost your borrowing power with alternative sources of income like returns on investments.Take along copies of your most recent statements for any term deposits, shares and other investments you may have as evidence of additional earnings.
4. Evidence of your financial position
Lenders are required by law to ensure that you can comfortably manage your home loan. Makes sense because while your home is a major investment, your home loan is an important financial commitment. This is why your Aussie broker will want to see details of your assets and liabilities including statements for other loans you may be paying off plus recent credit card statements.
Lenders often look at your credit card limit – not the outstanding card debt, when assessing your eligibility for a home loan. Ask your Aussie broker if a reduction of your card limit could help your home loan application over the line, if you don’t generally use your full limit.
5. A summary of your household living costs
As part of their commitment to responsible lending, many lenders will want to know about your regular household spending. Take a few minutes to summarise your usual household and living expenses and bring it along to show your Aussie broker.
6. Details of your first home
It makes good financial sense to speak to your Aussie broker before you begin home hunting. However, if you’ve already found your ideal home, you’ll need to bring some additional paperwork to the meeting including:
• A copy of the sale contract for an established home, or
• If you’re planning to build a new home, a copy of the construction plan, specifications and builder’s fixed price tender documents (if available) – including builder’s licence number, insurance, and council approved plan.
A bit of prior preparation can help your Aussie broker provide more accurate details of your borrowing power and get the ball rolling with your first home loan sooner. But if you’d just like a relaxed chat to know more about what’s involved with buying your first home, your Aussie broker is happy to answer any questions you may have.
You may also be interested in Home loan application 101: what to expect, step by step, Tackle the challenges of getting into the property market with the help of an Aussie broker, and All in a day’s work: What an Aussie broker can do for you.