In one of my previous emails, I explained that full-doc loans are the most usual option for property investors.
I also told you that I’d give you the information you need to provide to the lender if you want to get approved.
So, what information will your lender ask for?
The truth is, they’ll ask you to bury them in data. And they’ll start with your personal information. You’ll need to provide your passport, licenses, birth certificate, bank details, and a whole bunch of other information.
The lender will also ask about your marital status, your list of dependents, the ages of your children, and so on. All of this paints a picture of your personal situation that reflects your serviceability.
Of course, the lender will also scrutinise your financials to see if you’re eligible for a loan. That means they’ll want details of your credit cards, store cards, charge cards, and all other financial products.
Obviously, you don’t want to have too many credit cards, let alone any defaults on them. This can ruin your credit score and make it much harder to get the financing you need.
The good news is that you can go online and check your credit score to get an idea of your standing. You can just put in your name and bank details, and you’ll see your score.
This is important because there are many things that can show up on your credit report that many people aren’t aware of. For example, sending an inquiry about leasing a car will show up even if you don’t end up leasing the car.
The bank might call you and ask if you actually went through with it so that they can take it into account when determining if you should get a loan.
Other than this, your lender might ask you to provide details about your income, casual income, tax returns, and a bunch of other stuff.
And if you already own a property, there’s a whole other dimension of data that the bank will ask for. For example, you’ll want to keep a clean tenancy schedule that you can provide as proof that your cash flow is stable and high enough to service the loan.
Speaking of keeping clean records, you’ll want to make sure that all the data you need is neatly organised.
If you’re just starting out, the easiest way to do it is to call your broker and have them send you a list of everything you need. Then, you can start gathering the necessary documentation while making sure that everything is there.
I strongly advise that you save this information on Google Drive in PDF format.
This ensures that you can always have the data available to send to a lender when the requests come. You’ll likely apply for more than one loan in your career, so it pays to have all of this information neatly stored and retrievable when you need it.
My advice is to make some PDFs and spreadsheets of the data and upload it to an online storage.
And as importantly, keep them updated.
This can save you a ton of time that you’d have to waste to search for the documentation over and over again.
There’s no doubt that this whole process can be quite tedious at the beginning. So if you need any help, register for my webinar.