When you make an application for a loan, you sign a credit disclosure form that registers your application. It becomes part of your credit history whether or not the loan goes ahead. So I strongly recommend that you make inquiries to qualify your lender – to see if you meet each other’s guidelines for loan value ratio and debt service ratio prior to making an application.
When you apply to a traditional lender for property, they will want the following details:
• Applicant particulars such as names and addresses (generally, for the past five years), proof of identity, in the form of a photocopy of a driver’s licence and a current passport or birth certificate.
• Income of the applicants – generally, two or three recent pay slips, a letter from your employer or the most recent group certificate. If you are self employed, you will need your last two tax returns.
• Assets and liabilities statement. Liabilities focus on monthly repayments to which you are already committed, and the amount of overdraft, credit card or personal debt you have. You may need evidence in the form of a loan statement from your current lender (if any). Assets include any listed and unlisted shares you own, furniture, artwork, antiques, a fairly generous valuation of your motor vehicles and so on. You may need evidence of any property you own in the form of a recent rates notice, evidence of rental income from investment properties in the form of a statement from your managing agent and so on.
• Property details you are intending to purchase – its value and any projections of income from it.
>>> Coming Next: Creative Financing
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