Banks usually assess seven broad areas in a home loan application. They examine credit conduct, income, employment and living expenses. They also assess existing liabilities. The final areas are the savings and deposit position plus the proposed property. Each lender applies its own policy and serviceability model.
A broker should verify the evidence for all seven areas before submission. A strong result in one area does not cancel a policy failure in another.
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1. Credit Conduct
The lender reviews credit history, repayment behaviour and current debt. A credit score may support the assessment. High limits or poor credit utilisation can affect capacity or policy.
2. Income
The lender checks the amount, source and evidence of income. Variable, casual, bonus, rental or self-employed income may be treated differently under current policy.
3. Employment
Current role, probation and employment history can affect how income is accepted. Explain recent changes and provide the documents the lender requires.
4. Living Expenses
Banks compare declared expenses with transaction evidence and their assessment method. Understating expenses can delay the file and distort borrowing capacity.
5. Existing Liabilities
Credit cards, personal loans, buy-now-pay-later accounts and other commitments affect serviceability. Current lending criteria determine how each commitment is treated.
6. Deposit And Savings
The lender checks the source of funds and the resulting loan-to-value ratio. Gifts, grants or sale proceeds may need extra evidence.
7. Property And Loan Structure
The security must meet lender policy and support the valuation. Product choice, repayment type and current interest rates affect the assessment and repayment outcome.
mortgage brokers should package these checks into the application process and submit only when the evidence matches the selected lender’s rules.
