Low Doc Home Loans - Your Guide

Non Conforming Loans Podcast

If you’re self-employed or a small business owner, it can be tricky to provide the traditional home loan proof of income requirements. That’s where low doc home loans can be helpful.

If you’re a company director, sole trader or in a partnership with a registered ABN and looking to apply for a home loan, a low doc home loan could be a game-changer if you’re struggling with your home loan application.

If you’re applying for a home loan, lenders want to know that you can repay that loan. They do this by assessing your proof of income.

For employees who receive a salary, it’s easy - all you have to do is give them your payslips and other financial statements.

But if you’re self-employed or running your own business, it may be difficult to provide all the traditional documents you need to prove your income.

This doesn’t mean you don’t qualify to apply for a home loan, you just won’t be able to apply in the traditional sense.

So, instead, you can apply for a low doc home loan also known as an Alt Doc Home Loan.

When applying for a low doc home loan, some of the documentation you’ll need to provide include a Self Certification of your income plus one of the following:

· 6 months of lodged BAS Statements from ATO portal

· 6 months of Business Account Statements,

· Accountants Letter to Verify your income

The accountant’s letter needs to confirm the following:

1. Your full legal name, your company or business trading name and your ABN

2. How long your accountant has been servicing you

3. Your gross taxable income or confirmation that you can afford the loan

Because of the lack of documentation with low doc home loans, there is a higher risk to lenders. So, their low doc home loan products generally have higher interest rates and set up fees and require a larger deposit (generally 20%). So that’s something to consider.

Does this mean that you will be stuck with paying a high interest rate for the life of the loan?

Not necessarily, our loans are a vehicle to get you into a home. Once your meet the lending criteria of a Prime Lender you will be able to refinance to a more competitive rate.

If you’re unsure if you have enough documentation to apply for a standard home loan, check with your mortgage broker to get the right advice for your situation.

A mortgage broker can also help you find a lender and product most suitable to your personal circumstances.

if you have any questions about low doc home loans - we’d be happy to help at www.NonConformingLoans.com.au