Home Loan Requirements for a Secondary Residence

Thinking of financing your secondary residence with a Home Loan?

A common way to finance your secondary residence is through a Home Loan. You can directly transact with your bank or you can reach out to a mortgage broker for some help.

Here are the basic requirements to apply for a home loan to finance your secondary residence or granny flat.

It is important to note that requirements may change based on; when you’re applying, any economic change, what kind of loan you’re applying for, how you are looking to apply for the loan and your personal circumstances i.e. employment status, asset and liabilities, etc.

Each applicant has their own preference to whether they want to go  to their bank or to get a few different options through brokers. Just so that you’re aware in our case, banks need much less information than brokers, as mortgage brokers are highly regulated and make you complete a lot more documentation for the same type of loan. We do suggest whatever your preference is to see more then one option/ person in regard to your loan, just so that you know you’re getting the correct advice.

Below are the items you should expect to provide any bank or broker with:

1. Proof of Identification

Passport (or Birth Certificate/ Citizenship Certificate)

Driver’s License

Medicare Card

2. Income Verification

If employed-

  • Most recent payslips
  • PAYG Summary (or income tax statement, found on MyGov)
  • Current Employment Contract (if you are a contractor) 

If self-employed-

  • Most recent years tax returns (personal and business) and financials
  • Most recent years Notice of Assessments

3. Financial statements

The bank requires you to present your last two year’s financial statements.

  • Financial Statements
    • This is the book of information with opening and closing balance, profit and loss, etc.
  • Tax Returns
    • This can be supported by a Tax Portal (your accountant can provide this information)
  • Evidence of Assets
  • Statements
    • Credit Card Statements (last 6 months)
    • Income Statements (last 6 months)
    • Savings Statements (last 6 months)
    • Home/Investment Statements (last 6 months)
  • Proof of Living Expenses
    • A broker can help you with this information, excel spreadsheets or an app like Money Smart is a good option also.
  • Credit Report

4. Construction Documents

For the construction to proceed you need to present the following documents

  • Council approved plans
  • Building contract
  • Detail inclusions list and costings

You can request the construction documents and/or proposal document from your builder.

5. Important information to note

Please note that before you can get unconditional approval you must provide approved plans, a contract and a list of inclusions. This means once you sign up to a company generally you will need to pay the initial deposit with your own money that might be refunded from your bank/ broker upon getting the loan. 

Many people haven’t realised this step and getting a secondary residence can take much longer as companies who do the full process, i.e. plans and approvals, cannot sign a MBA or HIA contract until your plans are approved. 

Good luck with your loan and if you have any questions please contact us on:

1300 843 763 or 0403 THE POD (0403 843 763)

This article serves to provide you with general information about the basic requirements that you will need to finance your secondary home with a home loan. It is best to contact your bank or broker to get more information as requirements vary based on your personal circumstances.

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