Low Doc Home Loans for the Self Employed Australian.
Australia has over two million independent contractors or Self Employed. Many businesses don’t have their financials ready at the time of application so don’t fit into the Banks format.
It is difficult for the Self Employed Australian qualify for a mortgage from a bank compared to a PAYG worker. A PAYG worker generally only requires 2 payslips to substantiate income while Self Employed would require 2 years financials.
Financial statements and tax returns aren’t required for these loans, however lenders will need confirmation of income. For low doc home loans, you will need to satisfy the lender with a confirmation of income and profit. This can be a declaration of income certified by your accountant or Business Bank Statements or BAS Statements.
Low Doc Home Loan Options.
Our Low Doc Home Loans are available for both Clean Credit and Bad Credit and low credit score applicants. Low Doc Loans are available for Purchase or Refinance, Debt Consolidation and Cash Out.
Residential Zoned Property only to 85% LVR and to 75% LVR on Vacant Land or Construction.
A Low doc home loan is a great solution for the Self Employed Australian that does not have lodged Tax Returns.
The main documents required to verify your income for a low doc home loan are:
Self Declaration of Income plus one of the below documents to support your declaration:
- An Accountants Letter verifying your income.
- 6 months of Lodged BAS Statements from the ATO Portal.
- 6 months of Business Bank Statements.
Maximum loan amounts for Low Doc Home Loans.
- $1,000,000 to 85% of Property Value.
- $2,000,000 to 80% of Property Value.
- $2,500,000 to 70% of Property Value.
High LVR’s of 85% are only available in high population areas (Capital Cities or Major Regional Cities and Towns). You can have lower loan values in regional areas.
What do Assessors look for when assessing low doc loans?
Every lender has different policies, however there are some standard criteria.
- Length of ABN / GST registration: You need to have an ABN that has been registered. GST registered is required if sales are over $75,000. Most Lenders require ABN to be registered for at least 12 months. We have lenders who may accept an ABN registered only 3 months old.
- LVR: Maximum LVR is to 85%.
- Reasonable income declared for the business: Lenders assess if income and current assets are in line with Business and age. For example an 18 year old courier with no assets would be declined if they declared an income of $200,000.
- Clean credit: Best rates require clean credit applicants. We can lend to 85% with credit impairments allowed.
- Security: All Funders will take a risk on the applicant but not on the property. Properties that are in low population areas or unique, requiring major repairs or difficult to sell are usually not accepted.
- Cash out: Our Specialist Lenders will allow cash out up to 85% LVR.
- Debt Consolidation: Our Specialist Lenders will allow Debt Consolidation to 85% LVR.
For The Best Rates for Low Doc Home Loans:
Rates on Low Doc Home Loans are determined by these main factors.
- Lower the LVR: Higher deposits have less risk so rates are lower.
- Location: Capital Cities generally have lower rates applied.
- Clean Credit: Low Doc Home Loan Applicants with bad credit have a risk interest rate added.
Applicants may want to hold off until their situation changes and they have two years of lodged profitable tax returns. However, they will incur opportunity costs. This is the costs of delaying a purchase and missing out on the opportunity. Such costs can far outnumber the benefits of obtaining a low doc home loan now.
Talk to an Expert:
Our mortgage brokers specialise in Low Doc Home Loans also known as Alt Doc Home Loans with many low doc lenders on our books. Please complete our Assessment Form or Phone Direct and you can discuss your situation with an expert. It is important to deal with a broker that has several options and is experienced in dealing with Self Employed Lending.