Additional documents for Home Loan application
At times, the banks may require some additional document if your case is rejected. The reason may be due to high leveraging (multiple loans), income not sufficient to support or high liabilities with many banks. Therefore, you might need to support the banks with the following documents in order to get your home loan approved.
Tenancy agreement with at least 6 months rental income – this is an additional source of income which will help to improve your Debt Servicing Ratio (DSR)
Debt Serving Ratio (DSR) is the calculation method used by banks to determine how much loan is available for individuals. Factors like income, liability, age will affect the DSR calculation.
Balance in savings account – this prove to the banks that you are liquidity. Usually the bank need customers to have balance up to 24 months of their total installment.
Example: If you have a car loan of monthly installment of $800 and you are taking a home loan of monthly installment of $2000. Thus, the bank will need you to prove balance of ($800 + $2000) x 24 months = $67,200 in your savings.
Shares statement prove to the banks that you have strong assets. Usually the banks will factor in 70% of the current valuation of share price as a consideration of their calculation.
Overseas income or overseas bank balance
If you have income or strong balance in overseas bank. It is good to furnish the banks with the balance as it help in the DSR calculation. Since the income is in overseas and the bank will need to factor in the exchange rate risk. Generally, the credit department will only consider 70% of the balance.