All Topics / The Treasure Chest / What is an no docs loan?

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  • Profile photo of ChrisBedfordChrisBedford
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    @chrisbedford
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    In Steve’s ‘Property Secrets Revealed’ (intro to wraps CD) he refers to a “no docs” loan.
    Can anyone give a quick explanation of what this is?

    Thanks

    Chris B
    http://www.tradingsecrets.com.au

    Profile photo of DavidcannellDavidcannell
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    @davidcannell
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    It is a loan which does not require you to provide the same amount of documentation in order to get the loan as you would with a normal mortgage ie financial statements, tax returns. They may not be interested in your salary and may take your investment income into account instead/as well as. For this you pay a premium on the interest rate. I’m in the process of getting one at 7.25% to 90%LVR with no mort. insurance. Approved in 24 hours subject to valuation.

    Profile photo of FWFW
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    Hi David
    90% LVR? Can you tell us who you’re sourcing this through? I’ve only come across low doc loans up to 80%.

    Keep smiling
    Felicity 8-)

    Profile photo of ChrisBedfordChrisBedford
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    Thanks David.

    As Felicity points out, these sound like pretty reasonable terms. Do they look more favourably on an application from a company rather than an individual or is it all based on income/assets/liability?

    Chris B
    http://www.tradingsecrets.com.au

    Profile photo of darrenbdarrenb
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    I have bought 4 houses using this GE product and found it to be excellent. That is if you are prepared to pay a higher interest rate though. They will do 90% LVR in melbourne and large regionals. 85% for melton, traralgon, horsham. 70% for moe/morwell/corio/norlane. Suprisingly, there are no hidden extras and it is quiet cheap finance eg add on fees, solicitors etc. Service is excellent.

    Profile photo of wattowatto
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    Gday David,

    If you’re paying 7.25%, how do wrappees feel paying 9.25% minimum.
    When bank rates are as low as 4.99% for honeymoon rates????

    Cheers
    watto
    Melb Freestyler

    Profile photo of wattowatto
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    Gday Darren,

    Do you fully disclose to GE the purpose of the funds. Specifically that you are wrapping the security.

    Cheers
    watto
    Melb Freestyler

    Profile photo of Steve McKnightSteve McKnight
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    Hi,

    I understand that Greg Levett is sourcing a lot of wrap loans through GE under a full disclosure basis… but I welcome both Darren’s and Greg’s confirmation of this.

    Regards,

    Steve McKnight

    Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
    https://www.propertyinvesting.com

    Success comes from doing things differently

    Profile photo of MatthewWaiteMatthewWaite
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    Who are GE, and how can i contact them for a loan?
    Matt

    Profile photo of darrenbdarrenb
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    As to the higher interest rate Watto, I dont find this a hard sell at all. To someone who cant qualify for 4.99, this is a blessing. I sell my wraps on the basis that I can get most people qualified for bank finance in 3 years tops. I’m not interested in carrying it for 25 years and I tell my wrappees this. 9.25 is only for a short time for them and its the easiest product I’ve ever had to sell. Yes, GE is exactly aware with what I do, however to get this in writing in a contract is another matter! Actually GE main concern with me was that I was competition to them!!! True. And another thing, in 2 years since I did my first wrap, I have had not one call from my banker/lender complimenting me on paying my loan on time!No one cares what I do, but its horses for courses. I sleep at night. Cheers

    Profile photo of darrenbdarrenb
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    I can highly recommend Greg Levett on (02)8753 1188.

    Profile photo of DavidUDavidU
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    Darren

    How are you able to qualify your clients for conventional finance in 3 years? Something along the lines of them having an impeccable repayment history with you PLUS a minimum of 10% equity in the wrapped property?

    Your comments would be appreciated

    David U

    Profile photo of darrenbdarrenb
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    Yes David, exactly as you said it, plus buying well helps.

    Profile photo of DavidUDavidU
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    Thanks Darren makes perfect sense.

    Regards

    David U

    Profile photo of DavidUDavidU
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    Hi

    Whilst I appreciate the difference between fact and opinion, the likelihood of interest rates increasing further given today’s events is in my humble opinion fairly high.

    Given this, how do fellow wrappers intend to mitigate their risk using Low/no doc loans. By this I mean Low/no doc loans are generally of a variable nature (and generally cannot be fixed easily dependant on the lender).

    How do wrappers reduce their interest rate exposure and ensure that repayments remain affordable to their clients with these type of loans?

    Any comments would be appreciated

    David U

    Profile photo of AdministratorAdministrator
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    Darren,

    Thanks for the recommendation. All that is required for this particular “No-Doc” loan, the front page of the sales contract, a copy of the applicant’s drivers licence and passport and a completed application form.

    It is preferrrable if people could contact me on [email protected] I can then email a fact sheet and an application form. It is also a good idea to check on how much the bank will lend in the town chosen. The bank assesses their risk and have ranged from 90% to 85%, to not at all in a couple of towns.

    As I deal with 22 different banks and lenders I can also arrange a Line of Credit which can be used to drawdown deposits.

    Kind Regards,
    Greg Levett
    Mortgage Broker
    http://www.ald.com.au/greg

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