hi,
My wife and I think our easiest route for finance is comingup with the 20% for a no doc loan, can someone with experience tell me the positives and negatives of these packages??
for instance, is it harder to get a competitive rate? do you always have to pay for morgage insurance?
thankyou, we are in australia till next monday before flying back to indiana so any help over the holidays is appreciated!
Michael
Hi Michael,
I think on a No-Doc loan you can get 70% LVR only.
Some pros of No-Doc loan are:
1. No proof of income is required and therefore there is very little paperwork.
2. Because you are putting in 30%, you do not have to pay the Lender's Mortgage Insurance (LMI)Some cons of No-Doc loan are:
1. You have to put 30% deposit and therefore more of your cash is locked
2. The interest rate charged may be higher than the interest rate charged for a traditional loan
3. Because very little paperwork is required, non-residents can qualify for loans in Australia using a No-Doc loanSome lenders are making it even harder by charging mortgage insurance on all no doc loans. This is a recent development since the sub prime problems in the States.
With a no doc loan you must have an ABN. You only need it for one day. No GST registration is required unlike a lo doc loan where you may need it for a reasonable time. Requirements for these loans is constantly changing as well.
The good thing about no doc loans is that it may mean the difference whether you can buy a property or miss out.
Just to correct a couple of previous posts:
1) You will get 80% Nodoc however every loan is mortgage insured so you will be restricted on where you can purchase.
2) As every loan is mortgage insured (whether you pay for the MI premium will depend on who is funding the deal) the insurer will have a maximum exposure they would be prepared to go to which will limit the number of properties you can purchase.3) 2 of the 3 Ndoc lenders will not lend 80% to Expats.
4) Because of the securitised issue with Nodoc style loans the cost of funds has increased increasing the bottom line interest rate.
Personally I would always go the full doc route initially where possible and then use a mix of lodoc / nodoc style loans.
Wishing all members a Merry Christmas and Happy New Year.Richard Taylor | Australia's leading private lender
Qlds007 wrote:1) You will get 80% Nodoc however every loan is mortgage insured so you will be restricted on where you can purchase.
What does the above mean, Richard? Does it mean that you can still get 80% no doc – all my contacts indicate that .apart from RAMS, it is very difficult to get 80% no doc. Why will you be be restricted on where you can purchase? I must be reading you wrong.
Yes you can still obtain 80% Nodoc. Because the loan is mortgage insured there are certain post codes that the mortgage insurer will not lend hence this style of loan is not available in regional or rural small town areas where some of the higher + returns tend to be.
Richard Taylor | Australia's leading private lender
Qlds007 wrote:Yes you can still obtain 80% Nodoc. Because the loan is mortgage insured there are certain post codes that the mortgage insurer will not lend hence this style of loan is not available in regional or rural small town areas where some of the higher + returns tend to be.
Thanks, that clarifies your earlier statement. Apart from RAMS, can you name other lenders willing to give 80% no doc.
We have since found what we want, total is $500,000 approx.
Home will be as investment for 2 years then our home when we return.hence no first home owners and stamp duty on land!!
I've had an active ABN since 2002 but have no auzzie income for 2 yrs under that ABN.
My wife is self employed for 9 months and her business made $105,000 with a net profit before tax of $65,000.
I made approx 25,000 before tax.
We have a loan in the states of 128,000 on our home which we've had for just over a year.Assests of 20,000 home stuff and 18,000 vehicles
No debts and $40,000 in the bank.
Can also borrow from folks as gift….does this sound possible???????
We've only spoken with one guy who works direct for home building society, can anyone recommend some in perth for immediate help since we leave on monday…. just want to secure a block
THANKS!!!!!!!!!!
Hi Mabbott
Yes it does sound possible but unfortunately it is not a deal the Home Building Society will look at.
Richard Taylor | Australia's leading private lender
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