First Home Buyers – Can I Borrow from the Bank??
OWNING YOUR OWN HOME is the Great Australian Dream (in reality is getting further and further away for a lot of people) and can be one of the biggest financial decisions you will ever make – however, it can also be a mystifying and confusing experience, involving many professionals and a confusing process.
Can I borrow from the bank? That’s the single most critical consideration for first homebuyers. After all, there’s no point in house hunting if you can’t get a loan.
There are many variables that can influence your home loan eligibility and your lender will need an accurate picture of your current financial situation, such as evidence of your assets, income, budget and existing debts.
NAB’s Greg Harris advises potential borrowers to “Pay down your debts – try to clear them and close the borrowing accounts. If you have ongoing debt, stay on schedule with payments to maintain a strong credit rating,” says Harris.
One of the most important factors in acquiring a home loan is proof of income. The higher and more consistent the income, the easier it will be to make repayments. Banks will consider employment security and will also ask for proof of regular earnings such as payslips, PAYG summary and bank statements.
If you are self-employed you will need to provide your most recent individual tax return, business tax return, profit and loss statement and balance sheet.
Also enquire about low doc home loan options – in some cases lenders will take 12 months BAS statement and lend up to 50% on these, meaning you could actually qualify for finance a lot sooner!