Hi Forum People
We have a good amount of equity in our house about $500k, but a fairly low joint income of about $55k. We are looking at getting a couple of IPs at about $200k each as a start and then building on that. The problem with the Full Doc lenders for us is our low income and even taking proposed rental incomes in to consideration the lending seems to dry up for us at abourt2 or 3 properties.
Lo Doc loans seem to potentially offer greater lending potential but we are not self employed and our loan adviser seems to be suggesting that my wife (a part time teacher) apply by saying she is a teaching adviser/consultant, ie to give the impression that she is self employed to the lender. This feels a bit risky, possibly even illegal. And I am wondering if any of you well-seasoned people have any advice on this sort of thing??
You may very well be right. Lying on a stat dec would certainly be illegal. And there could be tax consequences ATO were to get a hold of your declaration where you have exaggerated your inocme – they might just beleive you and issue you with a notice of assessment on that income amount.
Having said that, what you describe is very common. There probably wouldn’t be too many low doc loans out there where people have put down the correct income.
An alternative is the No Doc loan where income is not required to be listed. These go to 80% LVR these days.
Terryw
Discover Home Loans
Parramatta
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Low doc loans usually require that you have an ABN number. Some lenders require you to have had this for a minimum of 2 years. As Terry has said, the alternative is a no-doc loan, which doesn’t require an income declaration or an ABN.
Having said that, I recently got a low doc loan from Westpac and they only required that I sign a declaration saying that I could afford to repay the loan. I didn’t have to sign any statement re my income.
Bear in mind however that the ATO is targeting low doc loans where borrowers have overstated their income. I always take out audit insurance in the event that I am audited. This covers my accounting costs (but not any fine or other penalties). So, if declaring income, just be careful that you can substantiate it in the event that you are audited.
Hope this helps.
Janet
0427 778875Thanks for your comments Terry and Janet. I dont think my broker was encouraging us to misrepresent our income however just what we do for a living. So my question really relates to that. Perhaps No Doc is in any case the way to go?
EB
As Terry mentions if you utilise a NODOC loan you cant get yourself in any problems.
Dependant on what LVR you are after at say 70% you should be paying pre-rate increase around 6.89%. If a lower LVR is acceptable then the rate would come down so would the set up costs etc.
Other lenders offer lodoc loans for PAYG applicants and that maybe another alternative. Usually a Statement confirming you are aware of the repayments is sufficient.
If you are not confortable with the advice being given switch brokers.
Richard Taylor
Residential & Commercial Finance Broker
**NODOC loans from 6.89%**
Licensed Financial Planner
http://www.yourstatefinance.com
[email protected]
Ph: 07-3720 1888Richard Taylor | Australia's leading private lender
Hi Janet,
What LVR was the Westpac lodoc loan?
Did you have to put down a ABN number?Thanks
GrantAny recommendations/suggestions of good ‘no doc’ or ‘lo doc’ (without needing abn) products in WA?
Iam in a similar situation to earlybird2.
Yes I know of 70 – 80% LVR No or Low Docs. No Asset and Liability statement to complete. Simple. Only an acknowledgement of payments and you can afford them.
Stuart Milne
Non-Conforming Specialist
READY Mortgages
http://www.readymortgages.com.au
[email protected]
Mob: 0404 056 055Grant
6.89% variable NoDoc (pre 0.25% rate rise) with no ABN is achievable.
WA is fine for lending purposes.
If you have an ABN then 6.62% for Lodoc.
Richard Taylor
Residential & Commercial Finance Broker
**NODOC loans from 6.89%**
Licensed Financial Planner
http://www.yourstatefinance.com
[email protected]
Ph: 07-3720 1888Richard Taylor | Australia's leading private lender
Hi Guys!
Can someone give me an indication of the interest rates I could expect on both a No Doc with a 70% LVR and also one at 80% LVR..
Prefer to stay away from Lo Doc because of the need to state income..
Greg
Grreg
As per previous post for NODOC.
Lodoc dependant on the loan amount – 6.72% + 0.25% rate increase (80% lend) serviceability statement signed.
Richard Taylor
Residential & Commercial Finance Broker
**NODOC loans from 6.89%**
Licensed Financial Planner
http://www.yourstatefinance.com
[email protected]
Ph: 07-3720 1888Richard Taylor | Australia's leading private lender
I would definitley not recommend making a false statement or it may come back to bite you – i would possibly recommend that you state that you are “property investors” – thats what you are – there is nothing wrong with that and its a legitimate business these days. Its how most of us create wealth (wages just pay the bills and lifestyle).
Certain lenders do not require an ABN for property investors.
Anita Marshall
Advanced Finance Solutions
http://www.advancedfinance.com.au
[email protected]
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