If you’re looking to apply for a first home buyer loan, there are certain eligibility criteria that need to be met. In this blog we will discuss the main requirements and documents required when submitting an application.
1.Prior Credit Issues
Whether or not you have had prior credit issues such as defaults or bankruptcy in the past 5 years. Generally lenders require no recent negative listings on your credit report if they are going to approve your loan application. However there may be some leniency given depending upon each individual circumstance which can always be discussed with your lender should it arise
Income is another important factor used by mortgage lenders.
2. Verifiable Income
To qualify for a first-time homebuyer loan, applicants must demonstrate verifiable income from reliable sources over a long period of time (e..g two year history). Documentation proving income stability and earning capacity such as pay slips extending back at least 2–3 years must also be provided before any loan agreement can commence.
3. Do you have any existing debts?
Lenders are also likely to evaluate those wishing to borrow money based on their existing debts including any existing mortgages or car loans etc., so having these paid down prior would put them more favorably. Loan affordability calculations taking into account all available information helps banks responsibly lend out capital while ensuring borrowers are comfortable with their repayments. Weighing up both sides here makes complete sense from both points of view – although lending guidelines can vary greatly between different financial institutions.
4. Personal Documents
Finally , additional documentation needed specific document requests pertaining directly yourself might add further processing involved: Identity Documentation:
- IDs (driver’s license / passport)
- proof of residence(utility bills)
- bank statements evidencing deposits & withdrawals
- Income purposes: payslips/ tax returns
- Employment particulars: job history
- Reference letters: professional references
Again every situation would slightly differ depending on the type financing being pursued and other conditions attached but it‘s generally safe to assume major appropriate due diligence undertaken.