We all have that dream: the dream of the perfect home. Whether it’s a penthouse condo, a country cottage, a sprawling manor or an elegant townhouse in the middle of the city, you deserve the chance to live in your dream home. At Family Finance we try to help you towards achieving that dream. Unfortunately, there is only so much we can do. Any prospective buyer must adhere to the regulations and strict rules required by banks in the 21st Century before they can be approved for a loan. Below, we’ve outlined the ten things you’ll need to get together before you can start shopping for a loan.
Knowing (and being able to afford) your deposit
Before you can think about home loans, you will need to decide how much of a mortgage you can pay back per month. How much do you earn per month? Do you receive dividends from investments? If so, how regularly and how much? How many sources of income are there and how much can you pool together? These are questions you have to take seriously. There are several advantages to a larger deposit- such as a lower interest rate- but really, it depends on the size of the property and the bank you’re dealing with. Know your finances and keep proof- you will be asked to verify your deposit.
Full employment history
It’s obviously important to the banks that they know you have a job, but it’s also equally important to know where you worked before, why you left, etc. They want to determine how eligible you are and the consistency of your work record-and references from previous bosses/colleagues- can be a great contribution.
Did you pay your rent on time? Did you pay your security deposit upfront? Intrusive questions yes, but generally deemed necessary.
Six months’ worth of bank statements
This is to check whether you do have the funds necessary for a deposit, and that you responsibly manage savings.
A rather important question: do you pay your taxes? And also another way of gauging your finances and income.
Credit card statements
How much do you spend? Do you spend as much as you earn? What’s your credit card limit and do you pay the bills on time? All factors your bank will consider.
List of current assets
This refers to assets of value such as jewellery, artwork, vehicles etc. If you’re in a pinch and you need to sell/offer something to pay the deposit, what do you have to sell/offer? It also includes mutual fund deposits, stocks etc.
This may sound absurd, but it could go a long way to recommending your application. It reassures the bank to have someone to vouch for you and that you’ll honour your commitments.
If self-employed, proof of returns from the business and credit approval rating
Chances are if you run your own business, you’ve taken a loan or have investors. The bank will need to know that you’ve fulfilled these responsibilities. Furthermore, the bank will need to know the business’ turnover.
Proof of identity
This may come last, but it certainly is not the least important. Passport copies and driver’s licenses will serve, but your bank might have different specifications.
To sum it up, you’ll generally need the above to get a home loan. In fact, you may even need more documents depending on your bank’s specifications. Family Finance will of course help you with these requirements, and we’ll find you a loan that suits you and what proofs you may possess.