What is a Statement of Position?

You hear this term used a lot when applying for a loan. So what is it and what importance does it hold?

A statement of position is a detailed description of all assets and liabilities held in your name, as well as itemized details of your monthly living expenses.

The assets section will require you to list all of the assets held in your name (personal and or business name depending on the structure of your lending application). You must list the asset type and value of the asset. Assets are items such as:

·        Properties, Bank accounts, Investments, Home contents, Vehicles, Personal items (jewellery, caravan, motorbike etc), Superannuation.

The liabilities section requires completion of any loans or debts held in your name (personal and or business name depending on the structure of your lending application). You will be required to list the liability (loan) amount owing, liability limit and the monthly repayment applicable. All liabilities will need to be disclosed, and some examples are:

·        Home loans, Personal loans, Tax debts, Credit cards, Buy now pay later facilities (After-pay, Zip pay), Loans or debts to family members, Large outstanding bills, Any other amount of money that you owe someone.

The living expenses section needs to be a detailed account of all of your living expenses for the year, broken down into monthly amounts. Living expenses are things such as but not limited to:

·        Food, Bills, Petrol, Insurance, Medical bills, Entertainment, Dining out, School fees, Childcare, Household rates and more.

Lenders do not take kindly to misrepresentation on a clients statement of position, so it’s critical that when completing one you ensure all of the information is accurate to the best of your knowledge. Being honest with your statement of position can also ensure that you won’t get into trouble down the track with any interest rate rises.