Exactly What is a Low Doc Home loan?
Low-doc loans are loans for self-employed people and small business owners in Australia who may not have the right paperwork when they go to a bank. Instead of going to a bank, where they might be turned down, they can go to an alternative lender and ask for a low-doc home loan.
People who can’t get a home loan because they don’t have enough paperwork or a way to prove their income without using the PAYG system can use low-doc home loans. So, they can instead send in the following:
- Business bank statements from the last 3 to 12 months
- BAS Statements for 6 to 12 months
- A letter from their accountant proving how much money they make
- Combining old tax returns (from more than two years ago) with current financial
People who may have been turned down for a home loan before have a second chance through an alternative lender. Depending on how much they need to borrow, they can use the loan to buy a home or homes, refinance, make repairs, build a home, buy land for development, or do any number of other things.
Who can Pursue for a low-doc home loan?
A low-doc home loan is for people who work for themselves or own small businesses and have trouble proving their business income. Or anyone who is self-employed and has been turned down by a bank or other major lender but really wants a home loan.
How do you apply for this low doc home loan?
You will need to find a lender outside of the big banks that can help you get a low-document home loan. Because there aren’t many of these kinds of lenders, you should do your own research. Not every lender is the same, and some may ask for a large down payment and charge high interest rates. So find one that works for you.
When you’ve found a good lender with good terms, you can then apply for a loan. During the application process, there is usually a phase called “quotation,” during which the person needs to ask for a quote that fits their specific situation. During this step, they will have to give the lender a few documents.
What they will need to submit are;
– ABN and, if applicable, if the business is GST registration
– Fairly clean credit, lenders will not lend with credit impairments.
– provide why the loan is congruent with the business they are in and their age, e.g. An 18-year-old retail assistant may not be allow for large amounts
- Security: Possible security may be considered but not if the property is in non-metro areas, unique, in disrepair, and or unable to sell
- Loan To Value Ratio: below 85% LVR on purchases, re-finance and cash out
The next step is conditional approval, which is when the lender says yes to the loan but only if certain conditions are met. After that, the loan will be approved, and then the official documents will be signed. Then the loan will actually start, and the borrower can go ahead and buy what they want.
Low-doc Loans in Australia?
Yes, you can still get them in Australia. Low-doc home loans are only offered by a small number of lenders, so be ready to look around.
Non-Conforming Loans is one of these lenders. Self Employed Australians can get low-doc home loans from Non-Conforming Loans.
– Direct lender: You deal directly with the lender instead of a third party, which makes the process faster and easier.
– Fast settlements—you can pay off your loan in 3–5 days
– Customer service is both online and over the phone, so you can get your problem fixed quickly.
We have mortgage brokers who focus on Low Doc Loans and have access to many lenders that most mortgage brokers don’t. Please fill out our Application Form or call us directly to talk to an expert about your situation. It’s important to work with a broker who knows how to help self-employed people get loans and has a lot of options.
If you want to move forward, we’ll help you fill out all the paperwork and talk to the lender on your behalf. This will include filling out and sending in your application for a low-doc home loan and keeping everyone in the loop until your home purchase is settled.
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