Hi all!
Just wondering if anyone out there has much experience with no/low docs loans?
I don’t currently have a fulltime job, so proof of income, etc. is a problem for “normal” borrowing, but I am keen to try and buy positively geared property – so that I don’t need to get a fulltime job!
Any thoughts, comments or experience would be greatly appreciated on how I might be able to overcome this “problem” (I’m guessing that No/low docs loans might be part of the answer?).Hi Gerard,
Low/No doc type loans were designed for self employed applicants, who through the assistance of a helpful accountant etc show a low taxable income, while in actuality they can afford to repay loan amounts which would require a higher taxable income.
Usually they ask for a declaration from the borrower as to their actual earnings (not their taxable income) and a maximum loan amount is obtained and then used from the declaired figures.
There are diferent types of low doc loans on the market requiring different amounts of documentation.(some also cater for ‘payg employee’ type applicants)
You will find that if you have been self employed for 2 years or more (holding an ANB as evidence) institutions will lend to a higher LVR than if you had a shorter trading history. LVR stands for loan to value ratio. ie how much as a percentage of the property you can borrow.
An easy example is someone who has been self employed for less than 2 years may have a maximum LVR of 65%. Where as if you have been self employed for more than 2 years you can borrow up to 80% of the value of the property.
There are quite a lot of different low doc loans out there on the market and they may prove a solution to your situation if your ‘declaired income’ can service the loan, and you have enough equity in another property you can use, or enough deposit available for the LVR on offer.
You also mentioned that you do not have a full time job. If you are part time or even casual you may still be able to qualify for a standard type loan product. Low doc loans are usually a higher interest rate that standard loans.
Hope this helps a little,
Cheers and happy investing,
Nathan.[
]Hi Nathan,
Thanks for the overview!
Do you (or anyone else for that matter!) have any recommendations of the best places to go for no/low docs loans?
Many thanks,
GerardHi Gerard,
If you drop me an email at [email protected] and let me know where you are located I should be able to suggest someone to talk to.
Cheers and happy investing,
Nathan[
]Gerard
With most Low Doc loans you still have to list your income, but they don’t verify that income. You still must qualify. ie your income must be high enough to service the loan.
Some banks require an ABN for 2 years as proof that you are self employed. And they check the ABN on the ATO web site to see when it was issued.
Others require that you are self employed but don’t ask for proof. Others accept PAYG as well.
The best (cheapest?) low doc loan is Suncorp. Suncorp allow low doc on all of their products at normal interest rates. So you could get a 6.07% low doc. But it pretty hard to qualify. They require that you have had an ABN for 2 years and you must already have at least $250,000 in equity which you have to prove etc.
Other lenders start around 6.55% for a 80% LVR low doc.
Hope this helps
Terryw
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hi Gerard,
A long time friend of mine is in the finance industry and is currently setting us up with a low doc product as I’m self employed. If you would like his contact details then please e-mail at [email protected][
]Hi Gerard
You mention you don’t have a full-time job so I am assuming you have a casual or part-time job. You do not have to be self-employed but you do require an income. The income/rent from the property you are purchasing can be used as income as well. Even though you do not have to prove your income, you must pass the lenders capacity test (eg the income you declare must be enough to service the loan repayments). Most low doc loans have a maximum of 80% LVR (loan to value ratio) so you would need 20% deposit plus the fees! Also some lenders will look at your A&L (assets and liabilities) situation. If you claim you are on a substantial wage they will expect to see some assets to show for it. Feel free to contact me if you have any specific queries.***************
Tracey Imbuldeniya
Authorised Finance Consultant
Mortgage Masters Pty Ltd
Ph: 0401 674464
Email:[email protected]
]
]Hi GerardThe topic ‘No/Low Docs Loans’ is closed to new replies.
