Low Doc Home Loans
Finding the time to run a small or medium business, manage cash flows, and meet statutory accounting and tax obligations is never easy. Purchasing property can be made even more difficult with lenders requiring you to jump through many hoops to secure a loan. Getting a home loan can become a drawn-out process, particularly if multiple business entities are involved. Low doc home loans cut through this red tape.
What are low doc home loans?
Low doc home loans are designed for self-employed applicants. Payslips or tax returns are not required for low doc home loans. Borrowers substantiate their income using other forms of documentation.
What documentation is required?
The documentation required for a low doc home loan may include one or more of the following:
- Business Activity Statements (BAS)
- In most cases you will be required to submit 12 months' worth of statements. The lender uses this information to decide if you are able to afford the loan given your turnover.
- Registered business name and ABN
- A low doc loan takes into account income made by you through your business. The lender will want information about your business. This will include your registered business name and Australian Business Number (ABN).
- Self-verified income declaration
- You may need to sign a statement verifying that you earn the amount you say that you earn, and that you can afford the loan.
- A letter from your accountant
- This is similar to the signed income declaration mentioned above. The lender may also require an income form signed by your accountant.
- Previous bank statements
- Depending on what lender you opt for, they may want to see statements from your primary business bank account. These are usually requested as far back as six months.
Lenders by law must fulfill the National Consumer Credit Protection Act (NCCP) of 2009 by making sure that they make reasonable enquires about your financial situation and verify the information you provide. This means they will verify your ability to repay the low doc home loan using a combination of your declared income and your declared ability to afford the loan.
How do I choose the right lender?
There are many factors that will determine the right low doc home loan lender for you. Every lender’s policies surrounding low doc loans, including their lending criteria, differ and are updated on a regular basis. It is imperative that you can meet the eligibility criteria for a particular lender before applying for a loan.
This is where the services of an experienced mortgage broker are essential to ensure a successful low doc home loan application. AAA Mortgage Broking maximise your changes of success by lodging your application with the right lender the first time. Please be aware that unsuccessful applications are likely to negatively impact your ability to re-apply with another lender.
AAA Mortgage Broking
AAA Mortgage Broking has extensive experience in the Finance industry and is committed to maintaining the highest possible service experience for his clients. At AAA Mortgage Broking we take the time to listen and help you navigate the mortgage market to secure the best outcome for you. With our unique experience and knowledge we will not only help you find the right product - we will work with you to maximise any benefits and ensure you are well equipped to make informed choices.
About the author
Peter Watman has extensive finance and automotive experience having worked in both industries for over 30 years. Peter founded AAA Finance and Insurance in 2012. He leads an experienced team that provides quick and easy finance solutions along with exceptional customer service.