Home Loan Application Requirements — To apply for a home loan, you need…

Before approving your home loan, any lender will need to be confident you can pay it off. So they have a checklist of criteria you must satisfy.

Below is a discussion of the more common requirements. Of course, the requirements vary from lender to lender, so it’s impossible for us to cover everything here; this information is a guide, not a prescription.

Savings

Most lenders require a deposit of some sort before they’ll give you a loan. So, naturally, if you have savings you can put towards a deposit, you’ll find it easier to get a home loan.

But many lenders need more than just a deposit. They also need to know you’re capable of making regular home loan repayments. The best way to prove this is to start putting a regular amount of money aside each month, before you apply for a home loan. This will dramatically improve your chances of approval.

IMPORTANT: If you have a deposit, but you don’t have a good savings record, you may still be able get a home loan. Resolve Finance has access to low-deposit home loans that require no proof of regular long-term savings habits. For these home loans, you could use, for instance, a lump sum you received as a gift, a tax return or an inheritance.

Employment

Most lenders require you to have been in your current job for a minimum of 3-6 months. It will also help your home loan application if you have worked in the same industry for a number of years. Generally speaking, the more steady and reliable your income, the more likely your loan will be approved.

If you’re self-employed

If you’re self-employed, most lenders will need to see two years’ worth of tax returns from your business, before they’ll consider offering you a home loan. But not all lenders. We have a number of low doc loans available for self-employed applicants, that require less in the way of business financials.

Few credit commitments

Before you apply for your loan, try to minimise your other debts. If possible, pay off any other loans (including interest free purchases) and even cancel a couple of credit cards.

Lenders need to be confident you can make all of your repayments, for all debts, not just your home loan. So every debt you have reduces your total borrowing capacity. And it’s important to note that with a credit card, it’s your limit that’s counted towards your debt, not your current balance. E.g. If you have a $15,000 limit on your credit card, the bank will reduce your total borrowing capacity, even if you haven’t bought a thing on the card.

Few mortgage applications

Every time you apply for a home loan (or a credit card, car loan, interest free purchase, etc.), it’s recorded on your credit file. All lenders check your credit file before approving a loan, and if it has a number of finance applications on it, this may affect your approval.

This highlights the importance of engaging a professional home loan broker. We know the lenders that will most likely approve your loan application, so you only need to make the application once.

Find out which lenders will approve your mortgage

Enquire below to have one of our consultants call you back within 24 hours. They’ll explain the mortgage application process in detail, and help you choose which particular lenders are most likely to approve your mortgage, given your current situation.