Low document loans
Low doc home loan are for those who are self-employed and are unable to prove their income through traditional means.
This is the only way that you can borrow without recent tax returns or financial statements.
Choosing the right low doc home loan can be difficult as lenders have different requirements and interest rates.
How do I get approved for a low doc loan?
We use the following three step process to help you to find a lender:
- Find out which documents you can provide, what your needs are and which lenders you can qualify with.
- Select the lender with the lowest interest rate, fees and LMI premium, as well as the loan features that you require.
- Present your application in a way to make sure it is seen favourably by the lender.
Did you know that if you provide partial proof of your income (e.g. an old tax return) that some lenders are now required to ask you for full financial statements and tax returns for all entities?
A lender cannot ignore a document he sees when completing their assessment. To avoid this issue, only provide the documents requested by the lender, nothing more!
Do I need to prove my income?
For modern day low doc loans, you are required to provide supporting documents to verify the income that you have declared to the lender.
Each lender has their own requirements and will accept different document types to prove your income.
The main documents that can be used to verify your income are:
- 12 months BAS statements showing a high turnover.
- An accountant letter verifying your income.
- Business bank statements showing a high turnover.
- Old tax returns (over 24 months).
- Interim financial statements.
Under the National Consumer Credit Protection Act (NCCP) Act lenders are required to have some kind of income verification from you before they can approve your loan.
If you can’t provide one of these documents then it is unlikely that you can get approval for a low doc loan. However, you may qualify for a no doc loan.
Who can benefit from a low doc loan?
Low doc home loans are designed to assist those who have a deposit saved or who have existing equity in a property but are self-employed and have difficultly showing proof of their income.
They can also be of use to professional investors, people with fluctuating incomes or people who have had a low income in the last financial year.
Contact Solution Home Loans today, speak to one of our Mortgage Broker, for a no-obligation discussion about your finance needs.