Traditional home or business loans require heavy documentation. This can be a deal breaker for self- employed professionals and full-time investors because of the unsteady nature of their finances.
This is because:
You may not have a steady income. In most cases, Low doc home loans for self employed.
You may not have up-to-date tax returns.
Your expenses written off for depreciation can show up as low income in your financial statements.
You may not be able to show your true income because of the heavy investments you have made.
This is where low-doc loans in NSW come into the picture.
What is a Low Doc Home Loans or Low Doc Mortgage?
Low Doc Mortgage, and Low doc loans provide a flexible lending option without the hassles of full tax documentation and other related financial statements.
The catch is in the higher interest rates charged, mainly because lenders consider low-doc loans a higher risk.
If You Have any inquiries related to low doc car loans or low doc personal loans with interest rates, Please feel free to Contact Our Services.
Who can Apply for a Low Doc Loan?
Typically, someone seeking a low doc home loans interest rates in NSW may belong to one of the following categories.
Full-time investors
Self-employed people
Seasonal workers
Immigrants
People without tax documentation
People with poor credit history
Document Requirements for Fast Apply?
Usually, lenders require some or all of the following documents for Low doc home Loans:
An income declaration signed by you stating your annual income.
An accountant’s letter printed on their letterhead stating that the said firm is your accountant. The letter needs to further confirm that you are in a position to meet all liabilities that come with your fast home loan.
Your Australia Business Number (ABN).
Past 12 months’ Business Activity Statements and prior tax returns.
Are alt-doc and low-doc home loans the same?
Though often used interchangeably, alt-doc and low-doc loans exhibit some distinctions. In general, an alt-doc loan requires more substantial income documentation than a low-doc loan, but it still offers greater flexibility compared to a full doc loan.
The implementation of responsible lending regulations in 2010 prompted a reduction in the availability of low-doc loans. For instance, Bluestone does not provide low-doc loans, but we do offer alt-doc loans that adhere to stricter lending criteria while serving as an alternative for self-employed borrowers.
When applying for a Bluestone alt-doc loan, you will typically be asked to furnish either six months of business bank statements or your last two BAS returns. This requirement is less onerous than that of a full doc home loan but provides a comprehensive view of your financial standing and capacity to meet repayments.
It’s important to note that many low-doc loans come with elevated interest rates and additional fees due to their classification as higher-risk loans. It’s advisable to scrutinize the terms and conditions before applying, as something that appears exceptionally advantageous may warrant a closer look to ensure it meets your financial needs.
How to Secure an Alt or Low-Doc Loan
Alt-doc home loans aren’t always available from every lender. Typically, major banks tend to be more stringent in their income verification requirements. If you’re seeking a more flexible loan, non-bank lenders, such as Bluestone, may be a better choice.
Here are several steps you can take to facilitate the processing of your home loan application:
Verify Loan-to-Value Ratio (LVR) Requirements: Before applying, check the LVR requirements for your loan. In most cases, a minimum of a 20% deposit is necessary for a low-doc loan.
Gather Documentation in Advance: Assembling your documentation beforehand can expedite the assessment of your application.
Research and Assess Fees: Investigate any additional fees and add-ons like lender’s mortgage insurance (LMI) or risk fees associated with low-doc loans. Keep in mind that not all lenders impose the same fees. For instance, Bluestone does not charge LMI.
Furthermore, there are additional factors that can bolster your alt or low-doc loan application, such as maintaining a solid savings history and possessing a clean credit report. These factors convey your financial responsibility and lower the likelihood of defaulting on repayments.
If you’re a self-employed individual seeking an alt-doc home loan, Bluestone might be a viable solution. Our loans offer flexible methods for income verification and can often assist borrowers who may encounter challenges with major banks.
MacArthur Mortgage Finance can help you find the right low doc home loans for you completely free of cost.
Contact us today to know if you are eligible for low-doc loans. Macarthur Mortgage Finance Is Located In Elderslie, Mount Hunter, New South Wales, Australia.
Frequently Asked Questions
What is a low doc home loan?
A low doc home loan essentially doesn’t necessitate the usual income verification process, such as submitting recent tax returns or financial statements. Different lenders may have varying criteria and accept a range of documents to evaluate your income, but common examples include a certified accountant’s statement regarding your income, Business Activity Statements (BAS), and historical tax returns. However, in low doc home loan, none of these documents will be asked for.
Who benefits from low doc home loans?
Low doc home loans cater to individuals such as small business owners, freelancers, and holders of an Australian Business Number (ABN) seeking to fulfill the criteria of a loan application. These loans are specifically tailored for those who face challenges in securing a home loan because they are unable to verify their income through conventional means. Low doc home loans are particularly suitable for self-employed Australians, investors who depend on investment income, and contract workers. Liberty’s low doc home loans offer an attractive combination of competitive interest rates and a variety of flexible home loan features, presenting options suitable for both startup and well-established businesses.
What are the requirements for low doc home loans?
Eligibility for low doc home loans typically hinges on having a favorable credit history and demonstrating the ability to meet repayment obligations. Many individuals may find themselves lacking the complete set of documents or financial records required for a standard loan application. This situation can arise if, for instance, your most recently filed tax returns are more than a year old and no longer accurately represent your current income. For further insights, you can explore our home loan calculators or reach out to a Liberty Adviser, who can engage with you to tailor a lending solution that aligns with your specific circumstances.
What’s the required deposit for self-employed individuals?
Certainly, you have the potential to initially secure a low doc home loan and then, at a later stage, refinancing to a full documentation loan, whether with your current lender or a different one. Following a year or two of consistently making on-time home loan payments, you are likely to have demonstrated your creditworthiness to the lender. Consequently, you may increase your chances of obtaining approval for a standard home loan with a more favourable interest rate and reduced fees, depending on the prevailing market conditions. Liberty offers a variety of home loan options tailored for self-employed borrowers. The specific deposit amount you’ll need depends on factors such as your credit history and the desired loan amount, making it unique to each customer. For more details, consider using one of our Commercial Property Loan Calculator, or reach out to a Liberty Adviser. They can have a conversation with you to understand your particular circumstances and assist you in finding a lending solution that aligns best with your needs.
What is the required deposit amount for self-employed individuals?
Macarthur Mortgage Finance offers a variety of home loan options tailored for self-employed borrowers. The required deposit can vary depending on your individual circumstances, including your credit history and the loan amount you are seeking.
Reach out to our Financial Advisor. We can engage in a conversation with you about your unique situation and help you discover a lending solution that aligns with your needs.
What should I do if I’m self-employed and have a poor credit history?
At Macarthur Mortgage Finance, we adopt a holistic approach when evaluating loan applications. Even if your credit score is less than perfect, we offer home loan options tailored to accommodate credit challenges.We understand that life can be filled with fluctuations, but your aspirations of owning a home need not be compromised. Engaging with your broker and openly discussing any credit-related concerns can pave the way for a successful home loan journey.
What features can a low doc home loan have?
While low doc home loans typically carry higher risk and higher interest rates, certain options may be available, such as the inclusion of features like an offset account, redraw facility, or the capacity to make additional repayments. Nonetheless, the availability of these features can differ from one lender to another and may depend on the specific loan product. Therefore, it’s essential to inquire beforehand if you are seeking a low doc home loan that offers any or all of these features
Where can I obtain low doc home loans from Macarthur Mortgage Finance?
Macarthur Mortgage Finance extends its low doc home loan services throughout Australia. Whether you reside in Elderslie, Mount Hunter, New South Wales, or a regional locality, you’ll find a nearby Macarthur Mortgage Finance Adviser ready to assist you. Low doc home loans serve as an excellent solution for borrowers who may lack the typical financial documentation necessary for a home loan application. Discover whether this option aligns with your needs by engaging in a conversation with a Macarthur Mortgage Finance Adviser.
