If You Are Self Employed,

A Low Document home loan may be what you are looking  for!

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What is a Low Doc home loan?

 

A Low Doc home loan is a mortgage that borrowers can take out with significantly less documentation than is required for a standard home loan.

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If you’re self employed, a freelancer, casually employed , a contract worker or someone who’s employment status does not meet the requirements of most major lenders a low doc loan is a great option for purchasing a new home or your next investment property!

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The LOW DOC or Low Document loan is also referred to as an ALT DOC or Alternative Document home loan. It is the only way to borrow with less of alternative paperwork and financial documentation.

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What's on offer?

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Borrow from 90% LVR:
You can borrow at a high 90% loan to value ratio like a regular finance application though the interest rate and risk fee *if applicable* is depicted by the loan to value ratio and may be higher. There are also options from 80% with no risk fees.

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Low Interest Rates:
With options from 2.89% for Owner Occupied loans and 3.09% for Investment loans there are many great, low-cost options available.

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No Risk Fees:

Traditionally a Low Doc home loan would have risk fees of roughly 1% of the loan amount, this is no longer the case with risk fee free options available from 80% LVR!

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High Loan Amounts:

Borrow up to $5,000,000 with little to no difficulty. Though this does of course depend on the transaction and security type there is a loan to suit every scenario.

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Fast Approval Times:

One of the biggest benefits of a Low Doc home loan is the ability to be assessed faster than most regular applications. This is due to requiring less documentation being needed to assess a lot of the lenders we use are able to fully assess an application with 24-48 hours.

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How do I qualify?

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Each lender has their own requirements and will accept different document types to prove your income.

The main documents that can be used to verify your income are:

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• An accountant’s letter verifying your income (sometimes lenders might call the accountant to verify the letter).

• A self-declaration of your income.

• 12 months’ BAS statements showing a high turnover.

• Business bank statements showing consistent turnover.

• Interim financial statements.

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Under the National Consumer Credit Protection Act (NCCP) Act, lenders require you to provide income verification before approving your finance.

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If you can’t provide one of these documents then it is unlikely that you can get approval for a low doc loan. However, you may qualify for a no-doc loan.

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Please email us on team@monei.com.au or enquire online for more information.

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Length of ABN/GST Registration:

Most lenders require you to have an ABN that has been GST registered for two years but this varies between lenders.

One of our lenders will accept someone who has had an ABN for just one day! This is usually especially handy for start-up businesses.

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Asset to Income Ratio:

Borrowers should have a good asset to income ratio though this is not essential. There are Low Doc options available that even allow you not to demonstrate consistent savings unlike most major lenders. You can receive a non-refundable gift from a family member and purchase a home or investment with little effort!

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Traditionally lenders use to like seeing that you have a net asset position that is equal to two times your annual gross income.

For example, if you earn $100,000 a year, you would be expected to have around $200,000 in net assets.

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You can get caught out by the assessor not accepting the structure or application once the lodged but don’t worry, with our guidance and experience we know how to navigate these hurdles to ensure you get your approval.

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Security Property:

Most Lenders prefer prime security properties in high-demand locations like capital cities or regional centers. However, there are many options available for properties in high-value areas and even regional suburbs though they may have LVR restrictions. Get in touch with one of our team to fund out if your property or potential property is subject to such restrictions.

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Equity Release

Though this is not always the case, most lenders require proof of how the equity being released will be used if any money is released directly to the borrower.

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Lenders are sometimes concerned that the borrower may not actually have an income and is using the money to make the repayments or that equity is being released to be used as a deposit to buy further properties.

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For this reason it is important to submit to the lender a strong application that satisfies the lender's requirements and grants a high probability of approval.

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Refinances:

With the current interest rates being so low and product offerings like no risk fees being available, a Low Doc refinance is very popular. In saying that some lenders will not refinance an existing low document home loan or existing investment loan but will allow you to purchase a property with a low doc loan.

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Refinances are known to be a higher risk than loans used to purchase a property. Unfortunately, many people are caught out by this, it is important to have the right advice and ensure you are choosing the right lender for your needs.

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The highly versatile Low Doc finance product, paired with an optimally structured finance solution, have the potential to allow you to purchase the home of your dreams or snatch up a great investment opportunity. Let’s crunch the numbers together and discover what impact these deals can make on your situation. 

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