Low Doc Home Loans
Australia has more than two million independent contractors or self employed. Many of these businesses do not have their financials ready at the time of application so do not fit into the Banks format for Self Employed. We have low doc funding for both clean credit and credit impaired for purchases and refinance up to 90% LVR and refinances to 85% LVR. Low Doc Loans are also available for Debt Consolidation, Discharged Bankrupts or Part 9, Unlimited Cash Out, Vacant Land and Construction Loans for Residential Zoned Properties at loan values depending on location and product.
It is actually quite hard for the average Self Employed Australian to get a mortgage from a bank in comparison to a PAYG worker who generally only requires 2 payslips to confirm income while Self Employed will require the latest 2 years of lodged financials for both business and personals. Although financial statements and tax returns are not required for these loans, lenders will require some form of proof that you can service these loans. For these low doc loans, you may need to provide the lender with a statement confirming your income generally certified by your accountant or Business Bank Statements or BAS Statements or a combination of above.
The main documents that can be used to verify your income are
- 6 to 12 months of Lodged BAS Statements where the lender uses a formula of between 40 > 60% of Sales as income (depending on type of business)
- An Accountants Letter verifying your income.
- 3 to 12 months of Business bank statements
- Old tax returns (over 24 months) in combination with current financial statements.
What is the maximum loan I can apply for?
- Will allow you to borrow to a maximum of $750,000 to 90% of Property Value
- Will allow you to borrow to a maximum of $1,000,000 to 85% of Property Value
- Will allow you to borrow to a maximum of $1,500,000 to 80% of Property Value
- Will allow you to borrow to a maximum of $1,750,000 to 75% of Property Value
- Will allow you to borrow to a maximum of $2,000,000 to 70% of Property Value
- Will allow you to borrow to a maximum of $2,500,000 to 65% of Property Value
High LVR’s of 90% are only available in high population areas such as Capital Cities or Major Regional Cities and Towns with lower loan values in regional areas apply.
What do Lenders look for in assessing a low doc loan?
Every lender has different policies, however there are some standard criteria for most lenders.
- Length of ABN / GST registration: You must have an ABN that has been registered (and possibly GST registered if sales are over $75,000) Most Lenders require ABN to be registered for 2 years. We have lenders that will accept an ABN registered for 6 months.
- LVR: Some Banks will accept low doc loans up to 60% LVR at standard rates, and some will consider up to 80% LVR on Purchases. Generally above 60% for refinance or cash out we will need to apply through a specialist lender.
- Reasonable income declared for the business: Lenders look to see 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: The major banks will not approve a low doc loan with any problems with your credit history. We have Specialist Lenders that will lend to 90% with credit impairments
- Security: All Funders will take a risk on the applicant but not on the security. Properties that are in non metro or regional population arears or unique, in disrepair or difficult to sell are usually not accepted.
- Cash out: Most Funders will not allow cash out above 60% LVR and require proof of how the loan funds will be used. ¬†We have Specialist Lenders that will allow cash out to 80% LVR.
- Debt Consolidation: Most lenders will not refinance an existing loan to Consolidate Debt above 60% LVR. We have Specialist Lenders that will allow Debt Consolidation to 80% LVR
Can I switch from a Low Doc Loan to a Full Doc Loan?
Most lenders will require full income verification such as 1 or 2 years tax returns and have a history of good repayment conduct. With other lenders there is no need to switch because low doc and full doc loans have the same interest rate
Talk to an Expert:
We have mortgage brokers that specialise in Low Doc Loans with many lenders that most mortgage brokers do not have on their books. Please complete our Application Form or Phone Direct and you can discuss your situation with an expert as it is important to deal with a broker that has several options and is experienced in dealing with Self Employed Lending.
If you wish to proceed, then we will help you to complete all the necessary paperwork and liaise with the lender on your behalf. This will include the completion and submission of your home loan application and the on-going communication between all parties until your home purchase is settled
- No tax returns or assessment notices.
- No financial statements.
- Income Verification is required by either Self Certification or Accountant Verification, BAS Statements or Business Bank Statements or a combination of above.
- Generally a higher interest rate if loan is above 60% of the property value (LVR)
- High Deposit Required