Facilitate your property finance application with a Statement Of Financial Position

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Statement Of Financial Position

What Is It And How Do You Prepare One?

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A statement of financial position will quickly give your bank a clear indication as to your credit-worthiness when you are applying for Real Estate Investment Financing.

It is a clear and simple outline detailing your financial details puts you in the best position and could be a strong influence towards you getting the best terms such as a good LOAN TO VALUE RATIO for your intended investment property and possible interest rate reductions.

This can be best achieved with a statement of financial position.

A Statement Of Financial Position will quickly give any bank or financial institution a firm basis on which to evaluate the strength of your loan application.

This is a simple statement that lists your assets and liabilities in addition to your income and expenditure details.

Assets Section

This is where you list anything that has a resale value and then you list the value it could be sold for at that time.

List things like your home at it's current value, your car or cars at their insured value and an approximate value for your furniture.

I also list superannuationand insurance details although they don't actually have a resale value, but it gives a good impression to the evaluating loan officer. But I don't include these items in the subtotal here.

Liabilities Section

Here list all outstanding loans. That is any loans against your home, car/s and also list credit cards.

With credit cards list them at their current outstanding balance and then the credit limit for that card. Most banks will automatically take any credit cards you have at the fully drawn value when assessing your loan application and so it is worthwhile minimising or eliminating unused credit limits on excess credit cards.

Income Section

This is where you list any income you are receiving including wages, share dividends, rent from other property and interest from money on deposit.

Expenditure Section

This is less important to include because the bank's assessing officer will have their own method for assessing your ability to repay the loan based on the liability details you have given them above.

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