Refinancing documentation is where most applications slow down or stall.
Lenders want proof of income, assets, liabilities, and property value before they commit to a new loan. If you submit incomplete or inconsistent information, expect delays. If you submit everything cleanly the first time, the process moves quickly.
The difference between a smooth refinance and a frustrating one usually comes down to what you send in the first week.
What lenders actually need when you refinance
Every lender requires proof of income, a summary of your existing debts, identification, and evidence of your property's current value. How you provide those documents depends on whether you're a PAYG employee, self-employed, or drawing income from multiple sources.
Consider someone refinancing a townhouse in Prahran who works full-time and has a small investment loan on the side. Their broker asked for two recent payslips, two months of bank statements showing salary credits, a copy of their current home loan statement, and the investment loan statement. The lender also ordered a desktop valuation on the Prahran property, which came back within range. The application was lodged on a Tuesday and formally approved the following Monday.
That outcome relied on submitting everything upfront. The payslips matched the bank statements, the liabilities were disclosed in full, and the valuation supported the loan amount. No follow-up requests, no conditional approvals waiting on missing documents.
If you're employed, your lender will want recent payslips and bank statements that confirm your salary deposits. If you're self-employed, expect to provide tax returns, notices of assessment, and sometimes BAS statements or financial accounts depending on your structure. The requirement doesn't change based on how confident you are in your income, it changes based on how your income is structured.
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Why your current loan statements matter more than you think
Your existing home loan refinancing statement tells a lender three things: your current balance, your repayment history, and whether you've been meeting your obligations consistently. If your statement shows missed payments or irregular patterns, that becomes part of the credit assessment.
Lenders also compare your current loan details against what you're asking for in the new loan. If you're refinancing to access equity, they'll check how much you owe now and whether the property value supports the increased borrowing. If you're refinancing to consolidate debt, they'll add up your credit cards, car loans, and personal debts to see what you're rolling in.
A statement that's three months old won't do. Lenders want the most recent version, ideally from the last 30 days. If your statement doesn't show the exact payout figure, your broker will request a discharge authority so the new lender can get that number directly.
How to handle bank statements without creating problems
Bank statements are where lenders look for income consistency, spending patterns, and undisclosed liabilities. They're also where applications get held up if the statements show unexplained deposits, regular gambling transactions, or repayments to debts you didn't list.
If your account shows a large one-off deposit, be ready to explain it. Gift from family? Include a signed letter. Sale of an asset? Provide the contract or receipt. Lenders won't assume the money is legitimate just because it's sitting in your account.
For clients in Prahran and surrounding areas, we regularly see rental income from investment properties mixing with salary deposits in the same account. That's fine, but you'll need to separate the two income sources on paper so the lender can assess them correctly. Rental income usually requires a lease agreement and evidence of consistent payments over several months.
If your statements show regular transfers to another person, the lender may ask whether you're supporting a dependent or paying informal child support. Both affect your borrowing capacity, and both need to be disclosed even if they're not legally binding.
What self-employed borrowers need to provide
If you're self-employed, expect to provide at least two years of tax returns and notices of assessment. Some lenders will also request your business financial statements, a letter from your accountant, or recent BAS statements to confirm ongoing income.
The challenge is that your taxable income might not reflect what you actually earn, especially if you're running legitimate deductions through the business. Lenders understand this, but they still assess you on what the ATO sees unless your broker structures the application to include addbacks for depreciation, one-off expenses, or other non-cash deductions.
One scenario involved a Prahran cafe owner refinancing to release equity for a second location. Their tax return showed modest income after deductions, but their accountant provided a profit and loss statement showing strong cash flow. The broker worked with a lender who accepted the trading figures alongside the tax documents, and the application was approved without requiring two years of higher taxable income.
If you've recently changed business structure, incorporated, or moved from sole trader to a company, let your broker know early. That transition can complicate the income assessment, and some lenders treat it as a new business even if you've been operating under a different structure for years.
How property valuations affect your refinance approval
Lenders won't rely on your opinion of what your property is worth. They'll either order a desktop valuation, a kerbside valuation, or a full inspection depending on the loan amount and the property type.
Desktop valuations are common for straightforward refinances where the loan-to-value ratio is conservative. The valuer reviews recent sales in your suburb and uses automated models to estimate value. Kerbside valuations involve a drive-by and external inspection. Full valuations include an internal inspection and detailed report.
If your property is in Prahran, the valuer will look at recent sales of similar period homes or apartments in the immediate area, particularly along High Street, Commercial Road, and the residential streets between Chapel Street and Orrong Road. Unit values can vary significantly depending on the building, so expect a full valuation if you're in a smaller block or an older development.
If the valuation comes in lower than expected, you have a few options. You can accept a smaller loan amount, provide a more recent comparable sale to challenge the figure, or switch to a lender who might take a different view on value. You can't, however, insist the lender ignore the valuation just because you disagree with it.
When to involve your broker before gathering documents
If you're thinking about refinancing and you're not sure what your lender will ask for, speak to your broker before you start pulling statements and tax returns together. They'll tailor the document list to your situation and flag anything that might complicate the application.
That's particularly useful if you've recently changed jobs, taken parental leave, started a business, or gone through a separation. Each of those situations changes what the lender needs to see, and submitting generic documents won't cover it.
A broker can also tell you whether your current loan allows penalty-free refinancing, or whether coming off a fixed rate will trigger break costs. That conversation should happen before you commit to a new application, not after you've spent two weeks gathering paperwork.
If you're in Prahran or nearby in Stonnington, you're likely dealing with higher property values and more complex loan structures than the average suburban refinance. Your broker should understand the local market, know which lenders value properties in the area conservatively, and be able to structure your application so it doesn't get knocked back on a technicality.
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Frequently Asked Questions
What documents do I need to refinance my home loan?
You'll need proof of income such as payslips or tax returns, bank statements showing salary deposits, identification, your current home loan statement, and statements for any other debts like credit cards or car loans. Lenders will also arrange a valuation of your property.
How recent do my bank statements need to be for refinancing?
Lenders typically require bank statements from the last two to three months. Statements older than 90 days are usually not accepted, as lenders want current information to assess your income and spending patterns.
What do self-employed borrowers need to provide when refinancing?
Self-employed borrowers usually need to provide at least two years of tax returns and notices of assessment. Some lenders may also request business financial statements, BAS statements, or a letter from your accountant confirming ongoing income.
What happens if my property valuation comes in lower than expected?
If the valuation is lower than expected, you can accept a smaller loan amount, provide recent comparable sales to challenge the figure, or try a different lender who may value the property differently. You cannot force a lender to ignore the valuation.
Why do lenders need to see my current loan statement?
Your current loan statement shows your balance, repayment history, and whether you've been meeting obligations consistently. Lenders use this to compare your existing loan against what you're requesting and to assess your credit behaviour.
