When applying for a home loan, a mortgage broker, financial adviser, the bank, etc. would normally give you a list of what documents to prepare. Different applications tend to have different requirements. However to help sum this up, here is an outline of the different documents you might be expected to provide.
Identifications is usually provided by a driver’s license and/or passport. It is a requirement that the identification used is not expired. If providing a drivers license, you will typically need to supply both sides of the license. Also, if you are not a citizen of New Zealand, you may need to prove your residency status. Many lenders require the candidate to be a New Zealand citizen or permanent resident.
Generally, a person provides the last 3 months or 90 days of their bank statements. These can usually be exported or downloaded from a person’s internet banking. When applying for a home loan, expect that the lender will review your bank statements to assess your character and conduct. They will be interested to see what expenses you have and what you spend your money on. You may also be required to show bank statements for other accounts you may have.
Loan & Finance Statements
Many people have loans, such as personal loans and vehicle loans. It is generally common to be asked to provide the last 3 months or 90 days of all your loan statements. Sometimes you can download this from your internet banking if the loan is with your bank. If it’s with another provider, you may need to phone that provider to request a copy of these statements. Expect that the lender will want to study your loan statements to understand your habits and how you pay your loans. They will be keen to understand if you pay on time, or if you have missed payments.
Credit Card, Finance Card and Store Card Statements
It is also common for people to have credit cards, such as Visa, MasterCard, and American Express. There are also other types of cards issued by different finance providers. Some stores also have their own cards, such as a “Farmers Card” or a “Warehouse Card”. It is typical to be asked for the last 3 months worth or 90 days all your finance liabilities. Lenders are also likely to study these to understand how you pay them off, and what you use them for.
Payslips and Proof of Income
It is typical to be asked for your last 3 consecutive payslips. This will help the lender understand your income. It can also help them to verify your income is what you say it is. It will also help them understand other matters such as how your income is made up of. For example, is it made entirely from an hourly rate. Or do you also receive bonuses, commission or overtime? It is also possible you could be asked to provide additional information such as data from the IRD to verify your income further. Sometimes you may also get asked for a letter from your employer.
For people who are self employed, the proof of income requirements can be a bit more complex. Generally speaking you may be asked for 2 years worth of financial accounts. You may then be asked to provide in conjunction with this, your IR3 and/or IR4 documentation from IRD. It is possible you can also be asked for supporting information such as cash flow projections and GST returns.
People can have different circumstances, there can be different information requested. If you are using KiwiSaver or HomeStart grant, you may be asked to provide additional verification around this. An example is that people wanting to use KiwiSaver towards their deposit may be asked for a KiwiSaver First Home Withdrawal Quote/ Estimate letter. You can normally get this by phoning your KiwiSaver provider. Also, if you are receiving a gift from a family member, e.g. “A $5,000 contribution from mum and dad towards your first home” you may be asked for a gift letter to help verify this.
This is not an exhaustive list of all potential documentation. Consider speaking to the broker, financial adviser or bank for further clarification on what may be required.