Help with Lo Doc & No Doc loans

Hi E

In answer to your questions

1. I understand from previous posts that Lo & No Docs are often postcode limited. Is there an accessable list somewhere to show which postcodes are ok? I know this probably varies by lender, but it would seem to make sense to have access to this before looking too far into a particular property or even an area. A) Whilst Gemworth and PMI have their own websites remember some lenders use both companies and also there are 3 or 4 other companies who use the smaller LMI companies or who self insure and your MB is probably an easier reference point

2. I know that a lot of lenders don't like properties with very small m2. ie. usually need higher % deposit, etc. Are there any special rules for Lo or No Docs? A) Dependant on the actual LVR then most lodoc policies would be similar to full doc lending.

3. What would be a typical 'premium' for a Lo Doc or No Doc over the current standard variable rates?  A) Again dependant on the actual LVR and whether it is Nodoc / Lodoc then is no reason why there would be any loading on the interest rate.

4. I gather that taking out a Lo Doc can make it hard to get a No Doc in the future. Is this the case?

4. I gather that taking out a Lo Doc can make it hard to get a No Doc in the future. Is this the case? A) It all depends on who you use and with whom they mortgage insure. A good MB should find away around for you.

5. What happens if you continue to make repayments (no problems meeting them), but you overestimate your income. Are there any potential problems with this? We run a business which is quite seasonal. How does this work? A) No problems with the lender as they will hope you will make your normal repayments. The ATO use cross matching to verify income in case where they believe it has been severally understated. Nodoc maybe the answer here.

Just remember each lender has its own serviceability rules and these can vary considerably. Whilst you may think you have reached your limit on a full doc basis with one lender you may find that with another your borrowing capacity is considerably higher.

Be careful of investing in
Student accommodation. (need to check with lender first)
Carparks (need to check with lender as usually not residential lending)
High density accomodation like greater the 10 apartments in block of apartments.(need to check with lender first)
Subdivisions greater than three may need to check with lender first to see if ok. (like you own all units or subdividing)
CBD high density apartment blocks .(over supply makes it hard for lender to sell if mortgagee sale, need to check first)

Lenders are not keen on vacant rural or income producing rural properties
Maximum size limits apply on rural and with a house on it if it is outside the main rural town . (need to check with lender first)

Another interesting issue is when a building has too much exposure for the one lender. This means that a majority of other apartments are mortgaged with the one lender. So in this case it is good if you know the building name if it has one , to give to the lender.