These documents vital to buying

2015-06-10 06:01

THE process of buying a house or property can be made easier and faster by having the right information and documents ready. According to Shaun Rademeyer, CEO of Better Life Home Loans, you will need the following.

Your credit record

You are entitled to a free credit report every year and it is a good idea to get yours and check it well before you think of applying for a home loan, because you may need some time to clean it up.

In addition, you need to remember not to apply for any new credit until your home loan application is approved and your new home is transferred into your name.

Proof of income

You should be prepared with payslips, copies of work contracts and any other documents that can help verify your income from employment for the past two to three years.

If you are self-employed, you will also need both personal and business bank statements and financial statements.

In both cases you should also bring your latest tax returns and assessments and if you have any other sources of income, you must also declare them.

A list of debt commitments and living expenses

What lenders want to know is if you will have enough of your take-home income left after these monthly payments to be able to comfortably afford the mortgage instalment.

So in general, the more debt you have, the less likely you are to be approved for a home loan.

Proof of cash reserves and other assets

Your mortgage originator will need to know how much cash you have available for a deposit on your chosen property, as well as the additional costs of a home purchase, such as bank and legal fees and any transfer duty that may be payable.

The bigger your deposit, the more likely you are to qualify for the loan, and the more likely your application will be approved.

If you have other assets such as a rental property, holiday home, share portfolio or valuable collectibles, you should also list these.

Use of property

This will probably not be an issue if you are planning to use the property as your primary residence, but if you are buying it in order to rent it out, you should provide a copy of the current lease, or an estimate from a recognised managing agency of the rental income you are likely to receive once the property is let.

Your originator needs to know what your plans are

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