Firstmac reduces max LVR on Low Doc

I think that was on the cards for a while as Kim Cannon never did like Lodoc.

Hi Is no doc still around or is that gone. And who is left that still will do low doc and whats there floating and fixed interest rate. Cheers

As Terry mentioned there are 1 or 2 lenders offering Nodoc but almost wiped of the face.

Lodoc 80 is still with us as long as you have at least 12 months ABN (GST registration if you declare more than 75K) with variable rates from 7.23% and fixed rates around 6.99%. 

Hi Keiko,

They start at the same as a residential loan subject to lvr and the type of security.

Loan Ranger,

You are correct. They have ridden out the storm, quite deliberately, and they have launched a 3.99% 1 yr Fixed Offste laon off the back of recent Government RMBS purchase. A great way to come back into the market with a bang.

FMC have just been treading water for a whild, and being selective about where to utilise their money.

Also, God of Money, if you don;t understand the need and usefulness of Lo Doc laons, and you genuinely believe they are the root of all evil then you should probably change your name to 'Moron of Money, because that is the extent of your understanding of lending.

Lo Doc loans have been abused by brokers, I agree.

I also agree that there have been a lot of people that have used Lo and No Doc loans to get finance they should not have, however there have been only the rarest cases of any of our banks actually losing capital with these loans. This is due to the 70-80% LVR guidelines.

Banks have lost far more capital on loans to morons with PAYG jobs not declaring debts and dependants and being able to borrow 97% LVR then the whole house of cards come falling down when they have their 20th kid and the baby bonus does not help them catch up on their mortgage repayments.

Also consider –

Self Employed 'token Tradesperson' earns $120,000 p.a.
He has several deductions, as his home contains storage facilities and an office, tools, fuel, power, phone, etc etc.
After his accountant legitamately deducts his expenses, he is left with a taxable income of $60,000.
He pays tax of approx $12,600  (note This is not exact – just an example)
His tax returns, as assessed for the bank, show his income to be $60, 000, and he does not service for his new home loan application. Application declined. Sorry sir, can't help you.
or

He uses a Lo Doc Application form, declares his actual income figure and his family gets the house. I would never recommend that anyone declare a figure that was artificially inflated, but in this case, and many like it, Lo Doc loans are necessary to achieve a fair result. If he was required to declare all his income to the ATO just to show the bank it exists, he would pay almost $20,000 more in income tax just because some moron in a room somewhere decided that all Lo Doc loans are for liars.

Lo Doc loans are perfectly legitimate loan types, and within reasonable LVR limits, expose banks to no more risk than any other type of loan. If you can demonstrate any FACTS to the contrary, I am all ears. Or should be expect to see you posting under a different screen name soon?

Have a great day.