Hello,
I working on my challenge of financing. A quick run down is: I’m self employed (less than 2 years), no ABN at the moment, and around $40K for deposit. No debts or large assets.
This is my first time in property investing (+ve gearing). I am looking at deals up to the $200K mark but obviously don’t want to blow my cash reserves on just one property.
I am assuming a low doc loan with 80% financing is the way to go. If I have to give a full 20% for the deposit then it limits how many properties I can afford.
After doing plenty of reading, the more creative options I have come up with are:
* vendor financing (even some of the deposit being left in the deal is an advantage)
* long settlement where I can add percieved value to the property then get a revaluation at settlement for the increased amount
* parents being guarantor on the loan (prefer the other options first)
* lying about income, etc (really prefer to steer clear of this)I don’t feel I’m in a terrible position, I’m sure other have been must worse off. I would like to know others thoughts and ideas on which way to go.
Thanks,
JoshMake sure you get an ABN asap. It is very hard to get a good, cheap low doc without having held an ABN for 2 years. If you haven’t got one, that means you are turning over less than $50,000 pa, which could be the case, but will mean it will be hard to qualify for high loan amounts. You still must declare an income for low doc loans.
Terryw
Discover Home Loans
Mortgage Broker
[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 Terry,
how about a self employed person with ABN for more than 2 years and same situation as JOsh, (about 40K deposit and no large debts or assets) ?
Could you recommend the best available lo doc loans for this scenario ? Also you said you still declare income on a low doc loan. How do you go about that, what papers/ documents you will need for declaring income ?
thanks
The majority of low doc products require the applicant to sign a declaration stating their income, in most cases all assets and liabilities will need to be declared on the application,
An ABN held for a minimum of 2 years is the norm, however there are certain lenders who will except low doc finance from applicants who have held an ABN for 1 day, rates and features do vary dramatically between lenders,
Regards
Steven
Mortgage Broker[email protected]
http://www.mobilemortgagemarket.com.au
Ph:0402483216
Ph:1800 820 500
VICTORIAPLEASE note comments made should not be taken as specific taxation, financial, legal or investment advice.
The reason for the 2 years in business rule is that most businesses fail in the first 2 years. As Steve says, there are lenders who will lend to someone who has had an ABN for less than 2 years but the maximum LVR is usually lower and the interest rate higher.
Margaret Wilson
[email protected]Originally posted by Aafreen:Hi Terry,
how about a self employed person with ABN for more than 2 years and same situation as JOsh, (about 40K deposit and no large debts or assets) ?
Could you recommend the best available lo doc loans for this scenario ? Also you said you still declare income on a low doc loan. How do you go about that, what papers/ documents you will need for declaring income ?
thanks
You may get at 6.85% for low doc.
Cheers
PropertyGuRu [sultan]
Mortgage Consultant
[email protected]NZ loan pre approval from Australia in 48 hours
Low Doc from 6.85%
You can get a Low Doc loan at 6.60% with no on going fees up to 80% LVR
Due to the popularity of these low doc products, we are now seeing more credit providers offering very competitive rates in a bid to capture a share of the once largely ignored sub prime lending market,
Regards
Steven
Mortgage Broker
Mobile Mortgage Market[email protected]
http://www.mobilemortgagemarket.com.au
Ph:0402483216
Ph:1800 820 500
VICTORIAPLEASE note comments made should not be taken as specific taxation, financial, legal or investment advice.
It is interesting to note Homeside has also relaunched their low doc loans. I haven’t had a good look, but beleive you can get them at normal rates.
Terryw
Discover Home Loans
Mortgage Broker
[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
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