Have you ever wondered why mortgage brokers ask so many questions about your financial and personal circumstances? It’s to ensure that fraudulent or incorrect home loan applications aren’t submitted to lenders and that your home loan suits your present and future needs.
As a broker, if we do not fulfil our legal requirements to complete accurate research about our clients’ needs and submit inaccurate documents and details, it’s possible to be legally penalised. Penalties can apply no matter if this was intentional deception, an accident or through the borrower providing incorrect information to deceive the broker and lender being applied to.
As a licenced financial intermediary, it’s our legal requirement that we fully assess your financial situation and goals for the immediate future through to the long term. This makes sure that any application we present accurately reflects your personal circumstances, and that the lender, loan and overall advice provided meets your best interests.
With any financial application, there are proof of identity requirements – with each lender having different requirements as well as State and Federal government requirements. Alongside identification, we need to review any borrower’s income documents, liabilities and ongoing living expenses. This will mean you’ll generally need to provide ID, payslips, bank statements, copies of any existing loans and credit card statements etc. Each lender has unique documentation requirements, so your broker will let you know the exact required documents.
Outside of financial documentation, we need to understand your living situation. Spousal relationships, dependants (both adult and child) and any other non-lending based commitments which provide an impact on your ongoing expenses. This information will help the lender work out your ability to pay for both your existing facilities as well as the new loan being applied for.
It’s essential to provide accurate information about yourself to the mortgage broker upfront, as this helps them understand your lending options and needs as a borrower. Providing inaccurate information can lead to loan declines, delays and potentially mean you cannot apply for a loan successfully elsewhere. Loan applications are noted on your credit file and any future application to another lender will require an explanation of the previous applications status.
Be aware that it’s common during the application process that a lender will ask questions which may seem minor or unimportant – it can be simple as your mothers’ maiden name, or an address from three years ago. This may seem like unnecessary delays, but it’s an important process that the lender ensures all information matches and that no fraud is being commitment, to protect both Australians from identity theft and from lenders finances being stolen.
To help reduce any additional requests for information and limit delays, ensure you provide any information requested by your broker upfront and provide the exact information needed. Common mistakes include providing outdated payslips, expired drivers licences or passports, low quality scans which did not show the information clearly and existing loan statements which are either out of date or missing pages.
If you need help with applying for a mortgage and want to make use of one of Perth’s most experienced mortgage brokers, contact us today for a discussion.