Hi all
I have a question about low docs and if i need to go down that path.
I have set up a trust with myself and partner as directors. I earn a wage and partner has just begun work on month to month contract. Between us, our wages can service a $240k loan at 80% LVR for an IP but because partner is on month to month, the banks have a problem with serviceability.
To get the finance is it best to go down the more unconventional path of a low doc loan? I have not used low doc before so not even sure if this is the answer?
Thanks,
MattMatt Jones | Property Resource Shop
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I suggest that you try some other lenders that aren’t as strict on serviceability – a good broker should be able to help you a lot here.
A LODOC is very similar – except you wont have to provide any evidence of employment. A simple declaration of income will suffice.
At this point some people and some brokers will suggest you declare a high enough figure to score the loan. This is fraud and the ATO are cross checking. They won’t believe you overstated the bank tho – they will want the tax on the difference!
A NODOC is safer again as you just sign a declaration that you can afford the loan. No figures are needed.
Difference is LVRs. Nodoc is 70% max and LODOC is 80% max.
Hope this helps
Simon Macks
Residential and Commercial Finance Broker
***NODOC @ 7.15% to 70% LVR***
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Originally posted by Richard in a duplicated post – I have transferred Richard’s comments here so there is continuity of conversation – Derek
Hi Matt
Firstly you and your partners won’t be directors of a Trust maybe of a Pty Ltd Company and that maybe the Trustee of the Trust.
For an 80% lodoc many lenders require you to hold an ABN for a period of 2 years other as little as one 1 day. The longer the period of time the greater the lending options available.
Several lenders accept lodoc applications from clients who are PAYG. It is horses for courses.
I assume your partner is on a month to month rolling contract which depending on how long she has been doing that should not be a problem. If you can organise the finance on a full doc basis i would try and do so and keep the lodoc loans for when serviceability gets a little tight.
Talk to a good mortgage broker who can give you a few options.
Richard Taylor
Residential & Commercial Finance Broker
**NODOC loans from 7.14%**
Licensed Financial Planner
http://www.yourstatefinance.com
[email protected]
Ph: 07-3720 1888I wouldn’t have thought they would have an issue with 80% LVR? Sounds like they don’t appreciate your Custom Matt.
Simon I always like your responses they are fantastic. Simple and easy to understand always a pleasure to read.
Matt the bottom line is speak to someone and if you don’t like the answer keep talking to new people until you do. In regards to the Low/No Doc option I would suggest don’t go there until necessary although a lot of Brokers will advise you to as it is easier for them to get the loan done! Ask around and you will get the right product for your Investment and make sure if you don’t think your lending associate is fully understanding your needs/wants write them down so they have it in front of them. It will make it simpler for you…
Stuart Milne
Non-Conforming Specialist
READY Mortgages
http://www.readymortgages.com.au
[email protected]
Mob: 0404 056 055And, if you are going to use a No Doc (can go up to 80% LVR with RAMS), consider having one person resign as director. This could help you limit the personal guarrantee to one person, reducing risk and saving the other person for more loans later.
Terryw
Discover Home Loans
Parramatta
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Terry, you forgot to mention the $500k minimum Loan Value on the 80% with RAMS
Stuart Milne
Non-Conforming Specialist
READY Mortgages
http://www.readymortgages.com.au
[email protected]
Mob: 0404 056 055Stuart
Thats the new ‘product’ (called 500 plus), $500,000+ with LMI paid by RAMS with an interest rate of 7.23%. The standard No Doc is the No Doc 80 which can be under. Got one of these approved the other day for about $360,000 at 80% LVR.
At the moment RAMS are bring out new products every week and it is hard to keep up
Terryw
Discover Home Loans
Parramatta
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Sign up to my mailing list.
Just send me a blank email, with “subscribe†in subject line.Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
My Apologies Terry, I missed that one in the Product Updates.
It is fantastic how rapidly they are changing their Products now though. Although it can be a problem getting an approval through them in a reasonable time frame…
Stuart Milne
Non-Conforming Specialist
READY Mortgages
http://www.readymortgages.com.au
[email protected]
Mob: 0404 056 055
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