Common Mistakes When Refinancing & What to Prepare

What Documentation Do You Need to Refinance a Home Loan?

Most lenders require proof of income, current loan statements, recent property valuations, and identification documents when you apply to refinance.

The exact list depends on your employment type and how you earn income. Someone employed full-time typically provides payslips and tax returns, while self-employed borrowers usually need two years of financials and tax assessments. If your income has changed since you took out your original loan, or if you've separated and your borrowing capacity is now based on a single income, lenders assess your application based on what you can demonstrate right now, not what you qualified for years ago.

Consider someone who bought a property jointly during a marriage and is now refinancing to hold it in their name alone. Their income might cover the repayments comfortably, but the lender still wants to see consistent proof over recent months. Two payslips often aren't enough if your income includes overtime, bonuses, or allowances. Lenders typically average variable income over three to twelve months, which means you need to gather evidence that shows the full picture. That same person might also need to provide a signed separation agreement or court orders if the refinance involves removing an ex-partner from the title.

Proof of Income That Actually Matches Your Situation

Employed borrowers need payslips covering at least the most recent pay period, and many lenders ask for up to three months.

If your income includes shift allowances, overtime, or commission, the lender calculates an average and applies a discount based on how reliable those payments have been. Someone working in healthcare with regular weekend penalty rates will find that income recognised differently to someone whose overtime varies month to month. Lenders also request a letter from your employer confirming your position, salary, and employment status. That letter needs to be dated within the last 30 days and printed on company letterhead.

Self-employed applicants provide tax returns, notices of assessment, and often full financial statements prepared by an accountant. If you've been self-employed for less than two years, some lenders won't assess your application at all, while others apply higher scrutiny or require a larger deposit. This is where a broker who understands self-employed loans can connect you with lenders who assess your situation based on your actual trading history rather than a rigid policy checklist.

Your Current Loan Details and Property Valuation

You'll need to provide a recent statement from your existing lender showing the current loan balance, interest rate, and account details.

Lenders use this to confirm exactly what you owe and whether there are any redraw balances, offset accounts, or linked facilities. If you're refinancing to access equity or consolidate debt, they also want to see statements for any other loans, credit cards, or personal debts you're rolling into the new mortgage. The property valuation usually happens after you submit your application. Some lenders use desktop valuations based on recent sales in your area, while others send a valuer to inspect the property in person. If the valuation comes in lower than expected, it can reduce the amount you're able to borrow or mean you need to provide additional funds to settle.

In our experience, people often assume their property is worth more than the market data supports, particularly if they've made cosmetic improvements that don't add measurable value. A lender doesn't factor in your new kitchen the same way you do. They base their assessment on comparable sales within the last three to six months, adjusted for size, location, and condition.

Bank Statements and Living Expenses

Most lenders require three months of bank statements from all accounts where your income is deposited or expenses are paid.

They're looking for consistent income, but they're also assessing your spending habits and whether you're managing existing credit responsibly. Frequent overdrafts, dishonoured payments, gambling transactions, or large cash deposits without explanation can all raise questions. If you've recently separated and your expenses have shifted because you're now running a single household instead of sharing costs, be prepared to explain that context. Lenders apply a benchmark for living expenses based on your household size and income, but they also review your actual spending. If your bank statements show monthly expenses well above the benchmark, they may reduce what you can borrow or ask for further explanation.

Someone refinancing after separation might also have ongoing payments to an ex-partner, either as child support or spousal maintenance. Those payments reduce your borrowing capacity, and lenders want to see documentation confirming the amount and duration. If the payments are informal and not covered by a court order or binding agreement, some lenders won't recognise them as a liability, but others will treat them as an ongoing commitment and adjust your serviceability accordingly.

What Happens If You're Missing Documents or Your Situation Has Changed

Incomplete applications sit in a queue until you provide what's needed, and that delay can mean you miss a rate you were trying to lock in.

If your fixed rate period is ending and you're refinancing to avoid rolling onto a higher variable rate, timing matters. Every week you wait is another week you're paying more than you need to. We regularly see applications stall because someone didn't realise their accountant needed to provide a specific form, or because their employer's letter was dated too far back to meet the lender's policy. Those delays are avoidable if you gather everything upfront.

If your financial situation has changed recently, such as starting a new job, taking parental leave, or having your income reduced, lenders assess you based on your current circumstances, not your previous loan approval. That can work in your favour if your income has increased, but it also means you need to prove stability. Someone who recently changed employers might need to wait out a probation period, or provide a signed contract showing their ongoing role. Someone returning from parental leave will need to show they're back at work and receiving their usual income, not just that they intend to return.

The Role of Identification and Credit Checks

You'll need to provide at least one form of photo identification, and lenders run a credit check as part of every refinance application.

That check shows your repayment history, any defaults or judgments, and how much credit you currently have access to. If you've missed payments on your existing mortgage, credit cards, or other debts, those marks stay on your credit file and affect how lenders assess your application. Some lenders have stricter credit policies than others, which is why the same application can be declined by one lender and approved by another. If your credit file includes defaults related to a separation, such as joint debts that weren't paid while you were sorting out the property settlement, a broker can help you explain the context and find a lender who'll assess the full situation rather than just the score.

Lenders also ask whether you've declared bankruptcy, entered a debt agreement, or been a director of a company that's been liquidated. If the answer is yes, you'll need to provide details and often wait a set period before most lenders will consider your application. This is another area where understanding which lenders assess these situations differently makes the difference between approval and rejection.

How a Broker Helps You Prepare and Submit the Right Documents

A broker knows what each lender requires before you submit the application, which means you're not guessing or resubmitting forms after a decline.

If you're refinancing to consolidate debt or take cash out, a broker can structure the application to show why that makes financial sense and how it improves your position. If your situation includes separation, a change in income, or anything outside a standard employed borrower scenario, a broker presents that information in a way that lenders can assess efficiently. The documentation process isn't about ticking boxes. It's about demonstrating that you can service the loan you're applying for, that the property provides adequate security, and that the refinance achieves what you need it to.

If you're unsure what you need to provide, or if you've been knocked back by a lender because something was missing or explained poorly, call one of our team or book an appointment at a time that works for you.

Frequently Asked Questions