What documents lenders ask for, and why

Australian lenders operate under responsible lending obligations. Before approving credit they have to make reasonable enquiries about your financial situation, verify what you have told them, and assess whether the loan is not unsuitable for you. Every item on the document list exists to satisfy one of those three duties.

It follows that the list is not negotiable in substance, though it is often negotiable in form. A lender that will not accept a screenshot will accept a properly generated statement. A lender that cannot use last year’s return may accept an accountant’s declaration. This is where a broker earns their place, by matching your documents to a lender whose policy fits them.

The other thing worth knowing early is that the paperwork is the pace. Assessment queues are usually measured in days. Chasing a missing page is usually measured in weeks.

Identity verification comes before any credit decision, and it runs on a points system. A primary photographic document carries the most weight, with secondary documents making up the balance.

• A current passport or Australian driver licence as the primary document.
• A birth certificate or citizenship certificate where a primary photographic document is not available.
• A Medicare card, and often a recent utility notice or rates notice showing your name at your current address.
• Evidence of any change of name, such as a marriage certificate, where documents are inconsistent.

Primary document

Passport or licence

Where no photo identity exists

Birth certificate

Address evidence

Rates or utility notice

Name has changed

Marriage certificate

When it is checked

Before credit is assessed

Names must match across documents. A licence in a married name and a tax return in a maiden name will stop a file, and it takes ten seconds to flag at the start and several days to resolve at the end.

If you are employed

• The two most recent payslips, showing employer name, your name, the pay period and a year-to-date figure.
• An income statement from ATO online services, or last year’s payment summary, to corroborate the payslips.
• For overtime, bonus, commission or shift allowances, a longer history. Lenders commonly want two years and will often count only a proportion of variable income.
• For a recent job change, a letter of employment or contract confirming the role, the start date and whether probation applies.

If you are self-employed

• Individual and business tax returns for the last two financial years, with the matching notices of assessment.
• Financial statements, usually a profit and loss and a balance sheet prepared by your accountant.
• Business activity statements, particularly where a lender is working from an alt-doc position.
• Six to twelve months of business transaction account statements.
• An accountant’s declaration where the lender’s policy allows one in place of full financials.

Rental income needs a lease or a rental statement from the managing agent. Government benefits need a current entitlement letter. Foreign income needs the source documents plus a translation where relevant, and only some lenders will consider it.

For a consolidation this is the core of the file, because the lender is funding these balances directly. Every debt being cleared needs a statement, and close to settlement each one needs a payout figure.

A payout figure is not the same as a balance. It includes accrued interest to the payout date, any fees, and for a fixed-rate facility it may include a break cost. Always work to the payout figure when sizing the loan.

Where a tax balance is part of the picture, generic references to owing the Tax Office will not carry a file. Lenders want the account itself.

• A statement of account printed from ATO online services or supplied by your registered tax agent, showing the balance and which account it sits in.
• Clarity on whether the balance is on the integrated client account, which typically carries activity statement liabilities, or on an income tax account.
• The payment plan letter if a plan exists, together with evidence that the instalments have been met.
• Any notice you have received, including a director penalty notice, a garnishee notice or a statutory demand. These change the timeline, not just the file.
• Confirmation of lodgement status, because a debt that is not yet lodged is not yet quantified.

Statement of account

The Tax Office record of what is owed and which account it sits in. Printed from ATO online services, or supplied by your registered tax agent.

Integrated client account

Typically carries activity statement liabilities such as GST and PAYG. Income tax generally sits on a separate account, and lenders want the distinction made rather than blurred.

Director penalty notice

A notice that can make a director personally liable for certain company tax obligations. It runs to statutory time limits and belongs with a registered tax agent or a lawyer, not only with a broker.

Garnishee notice

A direction to your bank, or to someone who owes you money, to pay the Tax Office instead of paying you.

Statutory demand

A formal demand on a company for a debt. Its deadline does not pause because finance is being arranged, which is why it is a first-call item.

Where property is the security, the lender needs to identify it precisely and understand what already sits against it.

• The current council rates notice, which confirms the legal description and the owner of record.
• Six months of statements for the existing mortgage, and a discharge or payout figure from the outgoing lender.
• A certificate of currency for building insurance, with the lender noted as an interested party before settlement.
• For a strata property, the owners corporation details and sometimes a copy of the plan.

Where a business or a trust is involved, add the ABN and ACN details, GST registration status, the trust deed in full including any amendments, and a current company extract. Trust deeds are read carefully, because the deed determines who is able to borrow and to give security. Send the whole deed rather than the first pages.