Loading...
Low Doc Home Loans
Low Doc Loans
Key Takeaways
A low doc loan is a mortgage that requires less documentation than standard Gold Coast home loans and can best suit self-employed individuals. Working closely with a professional mortgage broker ensures your documents are right to go before making an application and that you get access to the right low doc lenders.
Table of Contents
- What is a low doc home loan?
- How do low doc home loans differ from a standard home loan?
- Who is eligible for a low doc home loan?
- How much can I borrow?
- Will I get approved for a low doc loan?
- Choosing the low doc loan that suits your needs
- What are the requirements for a low doc home loan?
- Can I use a low doc home loan to refinance an existing mortgage?
- Are low doc home loans available for construction or renovation projects?
- What happens if I default on a low doc home loan?
- Why use a mortgage broker for a low doc home loan?
What is a Low Doc Loan?
A low doc home loan is a mortgage that requires less documentation than standard home loans.
This loan option can help you buy your dream property if you are self-employed, freelancer or casually employed or someone who doesn’t meet the requirements for standard home loan applications.
How do low doc loans differ from a standard home loan?
Low doc loans are essentially home loans for self employed. They differ from standard home loans in several ways. The main difference is that low doc loans require less documentation to prove your income and financial position compared to standard home loans.
With a standard home loan, lenders usually require proof of income and financial standing, such as payslips, tax returns, bank statements, and other financial documents. In contrast, low doc loans are designed for self-employed borrowers who may not have all the necessary documentation to prove their income and financial position. Instead of providing the usual documentation, self-employed borrowers can provide alternative documentation such as bank statements or an accountant’s declaration.
Due to the lower documentation requirements, low doc loan interest rates are usually higher, as well as its fees. Low doc loans also have more stringent lending criteria than standard home loans. They may also require a larger deposit, with lenders often requiring a minimum of 20% deposit for low doc loans.
Who is eligible for a low doc home loan?
This type of home loan is ideal for borrowers who have both assets and income and are not able to provide the usual paperwork, such as tax returns.
Low doc loans can also be used in cases where tax returns are not yet completed or are out of date. In these situations, alternative documentation (such as BAS statements), is required to better reflect current conditions.
Low doc home loans can be applied for by self-employed individuals, freelancers and investors who do not have a regular job paying PAYG taxes.
A low doc loan allows for a lot of flexibility. A low doc loan is ideal for contractors, freelancers, and consultants.
Not sure yet if you are eligible for a low doc loan? Professional Lending Solutions can help you discover if you qualify for one. Get in touch with us to find out if a low doc loan is right for you.
How much can I borrow?
With a low doc home loan, the amount you can borrow may be subject to certain limitations compared to a standard home loan application.
You may have to come up with a higher deposit requirement. Lenders may limit the loan-to-value ratio (LVR) to a maximum of 80%.
Depending on the lender, low doc home loans may come with a higher interest rate compared to standard home loans. This is because they are considered higher risk due to the reduced documentation requirements.
Some lenders may impose restrictions on the postcodes where you can purchase a property using a low doc loan.
If your loan amount exceeds 60% of the property’s value, you may be required to comply with risk fees.
Will I get approved for a low doc loan?
Lenders will still ask for some proof of income, although not as many compared to regular home loans Gold Coast. Here’s what low doc lenders typically ask of you when you apply for a lowdoc loan:
- To prove your income, you will need to provide alternative documents
- A majority of lenders require that you have a valid ABN for at least 2 years. However, some lenders are willing to accept you if you have held an ABN for less time.
- Some lenders will consider you even if you have less than excellent credit history.
Most common reasons that lenders decline low doc loans:
- Income is not high enough or lacks sufficient documentation to cover the loan.
- Undisclosed credit issues.
- Failure to pass the lender’s credit score.
- Where the security property is located.
- A property that is not suited for a low doc loan.
Choosing the low doc loan that suits your needs
What should I look out for when looking for a low doc loan?
As low doc loans carry a higher risk for financial institutions, they will place greater restrictions on this type of home loan.
Here are some factors for you to be aware of when considering a low doc loan:
- Higher interest rates. This all depends on the lender as well as the type of supporting documentation and verification you can provide. Note that your credit history may influence the rate.
- A higher deposit is usually required. However, some lenders may only require 20%.
- Risk fee is generally applicable if you borrow more than 60% of the Loan-to-Value Ratio (LVR).
How can I get approved for a mortgage with a low doc?
Finding approval for your loan isn’t as easy as it was in the past. This three-step process is how we as your trusted mortgage broker will use to assist you in finding a low doc lender:
1. Identify what you need the loan for, collect which documents are available to you, and find which lenders are able to help you.
2. Select the lender offering the lowest interest rate, fees and LMI premium and loan features that are most important to you.
3. Make sure to present your application in a manner that is favourable to the lender.
Pro-tip:
Lenders concentrate only on the documents that you provide to complete their assessment of your loan application. To avoid diverting to an unfavourable decision, only provide the documents that they ask of you and nothing else. They can always ask for further documentation later if they need it for their application process.
Which low doc loan lenders could I trust?
Certain low doc lenders might be better than others for your personal lowdoc home loan needs.
- Other documents may be required by lenders to prove your income.
- Low-interest rates are not always the best option, as some lenders may have hidden charges.
- You should also consider the risk fee and application fees lenders might charge.
We work hard to recommend a lender which allows you to refinance your loan to a full doc loan after you have completed all of your tax returns. Get matched with the right low doc lender by our highly experienced mortgage brokers.
What are the requirements for a low doc home loan?
What documents do you need to obtain a low doc loan for your home?
To be eligible for a low doc loan, you will need to supply supporting documents to prove your income. Each lender has its own low doc loan requirements and will accept different types of documentation to prove your income.
In general, these are the following documents that can be used as proof of income:
- 12 months of BAS statements with a high turnover.
- An accountant’s letter stating that they have verified your income. Lenders may sometimes call the accountant to confirm the details on the letter
- Business bank statements that show high turnover.
- Interim financial statements.
The National Consumer Credit Protection Act requires that lenders verify income before they can approve your mortgage.
If you are not able to provide any of these documents, it may be likely that the lender will reject your application. If you are in this position, please reach out to us for a FREE chat and we can advise you of your options.
Length for ABN / GST registration
Most lenders require an ABN that has been GST registered for two years. However, this can vary from lender to lender.
We have ensured to include in our panel of lenders one who will accept someone with an ABN even for one day. This option is most often used for start-up businesses.
Age- and occupation-related income
Lenders will decide if your declared income makes sense. For example, for an 18-year-old apprentice to declare an income of $200,000 is significantly higher than the median, increasing its chances for an application to be questioned or declined.
Your income and occupation are subject to the banks’ responsibility to uphold lending laws.
Security property
Lenders prefer prime security properties that are located in high-demand areas like major cities and regional centres. Some lenders won’t take properties that they deem are unusual, difficult to sell, or in disrepair.
Total exposure
Lenders will prefer and classify borrowers with lower total debts than $1,000,000 to be low doc.
A few lenders are willing to lend up to $2.5m per borrower group. (A group is classified as the maximum combined total borrowings of married partners, for example).
Our lenders can assist investors in borrowing more than $2.5m. But you need to have substantial assets and only borrow a small portion of the property’s worth.
Equity releases
Lenders require documentation to prove how funds are being used if money is sent directly to the borrower.
Lenders may be concerned that the borrower doesn’t have an income and might believe that the borrower is using the money to pay the interest of other loans or to put down a deposit for further property purchases.
Can I get a low doc home loan for an investment property?
Yes, it is possible to get a low doc home loan for an investment property. However, the eligibility criteria and requirements may differ from those for a standard home loan, and the interest rates and fees may also be higher.
As with any home loan application, it is important to discuss your options with a mortgage broker and choose a loan that suits your financial situation and investment goals. Carefully consider the risks involved with investing in property and seek professional advice if necessary.
Can I use a low doc home loan to refinance an existing mortgage?
Yes, it is possible to use a low doc home loan to refinance an existing mortgage, subject to certain criteria. Borrowers can refinance up to 80% of the value of their property, provided their credit history is clear, and they have made their payments on time for the last 6 months.
They must also have an ABN and provide either BAS, an accountant’s letter, or business bank statements to verify their income. Borrowing money for business, investment, or personal purposes is accepted.
Other factors that may influence the application include GST registration, credit scoring, industry, location, and size of the security property, and type of loan being refinanced. A mortgage broker specialising in low doc loans such as myself can assist in finding the best possible solution for refinancing.
Are low doc home loans available for construction or renovation projects?
Yes. Construction loans under low doc policy are accepted like normal construction loans. They are basically a low doc loan used for construction purposes.The facility for a low doc construction loan is being assessed and approved with little income paperwork.
The maximum LVR (loan-to-value ratio) you can get for a low doc construction loan is 80% LVR. Most lenders will lend up to 80% LVR for a low doc construction loan, with some lenders only considering loans under 60% LVR.
You could get a low doc construction loan using all types of low doc assessment methods, including low doc with no BAS, low doc with BAS, low doc with accountant’s letter, trading accounts low doc, and income declaration low doc.
The lenders who approve construction low doc loans require a signed builder’s contract together with the relevant council approved plans for the proposed construction. Most lenders will do a low doc construction loan using a variable rate loan, while a small number of lenders will offer other loan products, such as a standard variable loan, basic loan, fixed rate home loan, offset home loan, or interest-only loan.
The interest rate for a construction low doc loan can be the same as a normal full doc loan depending on the lender that is used, and there are some lenders who charge a slightly higher rate in some cases.
What happens if I default on a low doc home loan?
If you default on a low doc home loan, you may face various consequences. Once you fall behind on your repayments, your lender may send you a default notice, giving you 30 days to make the outstanding payments, including regular repayments owed. If you fail to pay the overdue amount within the given deadline, the lender may repossess your property and sell it to recover the debt.
Unfortunately, this could lead to losing the roof over your head.
Missing a mortgage payment can also result in fees, which can cost as much as $200, depending on the lender. To add insult to the injury, the interest on your loan can increase as you have to make up lost payments over time.
Your credit report may also show a mortgage default, which can negatively impact your credit rating and significantly hamper your lending capabilities in the future should you choose to access another form of finance.
What steps can I take when I default on my low doc home loan?
1. Reduce your repayments to the minimum amount or change the payment frequency by contacting your lender.
2. If your mortgage has an offset account or a redraw facility, you may be able to use excess funds to cover repayments.
3. You can restructure your mortgage by moving from a variable to a fixed rate, switching to a split variable/fixed rate, or staying with a principal-and-interest loan.
4. If your lender is not willing to work with you, you can consider refinancing with a different lender to find a more competitive interest rate and better COVID-19 packages.
5. Downsizing to a more affordable home can be a difficult decision, but it may free up extra money each month thanks to lower repayments.
If you default on your low doc home loan, your lender may take legal action against you, so it’s essential to work with your lender as soon as possible. You can seek advice from financial hardship teams or free financial information services to help you understand your rights and options.
You can reach out to the National Debt Helpline at 1800 007 007 for free financial counselling.
Why use a mortgage broker for a low doc home loan?
With the vast number of lenders and varied offers out there, it is crucial that you speak with an expert in low doc home loans to get matched with the right lender and to find the best deal for you. Low doc loans now offer professional packages and basic loan discounts, much like full doc loans, and navigating all your options could overwhelm you, or worse, derail your chances of getting approved.
There are also significant differences between lenders when it comes to LMI premiums and application fees. Although this information is not publicly available to lenders, we as mortgage brokers are aware of it.
If I work with you, can you guarantee that you will give me access to the best low doc home loans?
As a mortgage broker, I cannot guarantee that I will give you access to the “best” low doc home loans on the market. This is because claiming that a particular low document home loan is the “best” is not allowed by ASIC regulations.
As mortgage brokers, our job is to help you find a home loan that is most suitable for your specific needs and circumstances. We assess your financial situation, discuss your goals and preferences, and recommend a range of lending solutions from our panel of lenders. Ultimately, the right home loan for you is the one that meets your needs and fits your budget. So, while we cannot guarantee that we will give you access to the best low doc home loans, we can certainly work with you to find the most suitable loan option for you.
Our lines (and doors) are always open to serve individuals like you who may be wondering if low doc loans are their best option. Get in touch with Professional Lending Solutions by booking your preferred time or by calling us at 07 5597 6049.
Loan Enquiry
5-star reviews from happy clients!
A heartfelt thank you!! Goes out to Phil and the entire team atProfessional Lending Solutions. Their unwavering support and guidance have been crucial in ensuring the success of my property journey. I am truly grateful for everything they have done and could not have accomplished this without their expertise and assistance.
Phil and Professional Lending Solutions helped us sort out a home loan on very short notice, and it was smooth and hassle free. We were very impressed with Phil's friendly and professional interactions. Thank you so much!
Phil, Jenny and team worked tirelessly to get our transaction over the line. Given the tight timeframes, and more complicated refinance and purchase there were numerous credit conversations. We were fortunate to have their advice, industry expertise and ability to deliver under changing circumstances. Ultimately, Charlotte and I were able to settle on time and seamlessly with Professional Lending Solutions help.
Fantastic customer service again and again. We have been with Phil and his team at Professional Lending Solutions for 5+ years now. Phil helps our small business with a variety of essentials, ranging from cash flow to equipment loans to vehicle finance and of course the complimentary personalised business advice that’s invaluable, which helps us to make educated financial decisions.
Phil and the team at Professional Lending Solutions provide a great service, have a wealth of knowledge, and conduct their business in a very professional and timely manner. I would recommend them to anyone looking for finance.
We couldn't recommend Phil and his team enough! We've been working with Phil for about six months to get us to a position where we are able to purchase our own home, and are getting ready to move into our dream home as we speak.Phil's been straight up with us in regards to our options throughout the whole journey, and worked with his connections to get our application across the line amid investment property settlements, and the added complication of both of us owning our own businesses.We hope to never move again (!) but will be back to talk to Phil for our refinance options in the future 🙂
Phil was amazing to work with, very knowledgeable and was a stress free process to refinance my loans. Would highly recommend his services.
Phil was recommended to us and we could not be happier with the result we achieved having him by our side for the sale of our home and the purchase of our new home.Phil was incredibly prompt, honest and professional. He addressed every single query (and there were MULTIPLE) in such a timely manner. Phil helped map out the nitty gritty details from the get-go with honesty and his professional opinion so that when we decided to go ahead and buy in this current market, instead of waiting, we were able to achieve settlement in such a tight timeframe (21 days to be exact). We will DEFINITELY be approaching Phil in the future and are 110% more than HAPPY to recommend him to friends and family. Jenny, thank you for being the behind-the-scenes magician during our entire journey. We are very appreciative of your hard work (especially in the moments right before settlement).
I have been using Dean for all my financial requirements for a few years now, along with others in my family. He has become our family finance guy. He always finds the right deal, gives great advice and makes the journey easy. I recommend to anyone !
I was recommended the service of Phil through my Real estate agent.,if you need assistance with your home lending please go and see Phil, exceptional service and with his corporate Banking background he understood our finance need and was able to recommended the right product for us.Thank you Phil & team
Phil was brilliant. The turnaround for our re-mortgage was very quick, and Phil made the process seamless. Would recommend 10/10.
Phil & his team are amazingThey supported us through buying our first home in Australia, they were always on hand to answer our many questions either via email, phone or in person.Super professional but also down to earth and friendly- would 100% recommend
I cannot express how grateful I am for the exceptional service I received from Phil during my journey to buy my first home. From the very beginning, his dedication to guiding me through the complex process of obtaining a mortgage was truly remarkable.Phil demonstrated a level of honesty and transparency that I never expected from a mortgage broker. He patiently walked me through all the available options, explaining every detail in a way that made sense. His expertise gave me confidence in the decisions I was making.What truly set Phil apart was his commitment to my best interests. He went above and beyond to find a loan that was tailored to my financial situation, ensuring that I wasn't taking on more than I could handle. His advice was always genuine and well-informed, and I never felt pressured into making any decisions.Throughout the entire process, Phil was incredibly responsive. He promptly answered all my questions, no matter how big or small. It was evident that he genuinely cared about my experience and wanted to see me succeed in securing the best mortgage for my new home.I cannot recommend Phil highly enough.
Phil and the team at Professional Lending Solutions worked with us efficiently to help us secure our family home. The team kept us informed and helped us every step of the way. Our experience with Professional Lending Solutions was fantastic and I would highly recommend!
This business does a very professional job and made the whole process of our financial application smooth and easy. Phil also was very responsible and respectful and i felt we could trust him and his process as well. Highly recommend this broker!
As a first home buyer the whole process was a bit daunting. Phil and the team were in real and simplified the lot. They really went to battle with the banks for me (being self employed) and got me the best possible outcome. Can’t recommend them high enough !
Phil and his team went above and beyond with the service they provided.I have been a long term client of PLS as I could not find a house that met my budget.Phil was very understanding as he listened to all my questions I had to ask. He provided me honest feedback which made me feel safe and comfortable that I made the right choice in choosing him.Because it was my first time buying, PLS answered every question I had without frustration or judgement as they had to explain things to me once, twice and something a third.It was a very stressful life decision that should not be taken lightly and with Phil and his team behind you, you will never be made to feel as if you made the wrong choice with choosing them as a Broker.Many thanks once again.
We couldn't recommend Phil and his team enough. They were amazing and so helpful through the whole process. Having only moved to the country 6 months prior it was a stressful situation for us but they made it so easy and stress free. Will definitely use them in the future if need be!!
Phil and the team from Professional Lending Solutions were very easy to work with and as with the name states were very professional!For clarity I’ve known Phil for many years and I’ve seen how he was able to help others get into their first homes and even second homes. It was now our time for the team to help us.We had many questions and were able to get all the answers we needed to make the right decisions.If your looking for a professional team that takes the time to explain all the processes, keeps you informed and gets things done then take the time to give them a call to see how they can help make your dreams a reality!
We went to see Phil to refinance our home loan and consolidate our loans. Phil was full of information and very professional. We couldn't believe how quick Phil had got everything done for us. So thankyou very much Phil we would definitely be referring family and friends.
Phil, Jenny and the team at Professional Lending Solutions were more than what we could of hoped for. Very informative and were there through every step of the process. We couldn't done it all without them. I cannot recommend them highly enough. Every single one of the team is friendly and totally professional and helped put us at ease through every step.Thank you!
We were reccomended Phil and his team from word of mouth (people I work with). As first time buyers we had many questions and alot of learning to do. Phil and his team were always a email or phone call away and were happy to answer all the questions we had. The process was easy from our very first face-to-face meeting and we felt confident in putting our trust in this team. Thank-you so much for starting us on a property journey. We would highly recommend their business! Pete and Marie
Phil & his team were absolutely amazing through the whole process of buying our home. They were happy to answer any and all of our questions no matter how silly they were and guided us through the whole process. They made buying our home stress free and let us enjoy all the excitement without having to be concerned about all the small details.If you are looking to buy a house or even just considering it you should definitely give Phil and his team a call. They will get you right on the path to your home.
Phil got our first home loan 8yrs ago when we thought we couldn't and since then we've refinanced several times to ensure best rates as well as a business car loan. Always a personal approach, highly recommended.
The best brokers in the business.Phil and the team at PLS went above and beyond to help us refinance our mortgage and find the best solution for our circumstances.Phil is professional and fantastic to deal with.Highly recommended!
Very happy we went with Phil and his team, being our first home we didn’t know what to do or understand a lot about buying a property we just knew we wanted one and Phil and his team walked us through every step and made it easy! Would 200% recommend
Mel, Phil and the team at Professional Lending Solutions were simply amazing. Nothing was too much of a hassle. They made the whole experience extremely easy, stress free and had it approved within 3 days. We couldn't be happier with the service and would highly recommend their business! Will be using again!
Phil was incredibly helpful, patient and honest throughout the entire process of re-financing. I appreciated his thorough and detailed answers to my questions, as well as his amiable nature. He was open and spoke with great candour, ensuring the entire process was simple, stress free and, straightforward. All in all a top bloke and skilled broker who I would certainly recommend. Thanks again!
You should use Phil and the team at Professional Lending Solutions! We have used them a couple of times and they make it so much easier to manage the mortgage process - and know you’re getting the best personalised deal. Phil is so lovely and very responsive. Will be using them again.
We recently went through the often stressful process of selling our home and purchasing another. Phil and his team came up with the best tailored finance solution for our situation and were always on hand to provide guidance around the process from start to finish.I couldn’t recommend Professional Lending Solutions any higher, they were simply superb to deal with!!!!
Many thanks to Phil and the wonderful Professional Lending Solutions team! Having Phil in our corner for our financial needs has played a key role in securing the appropriate home loans for us. Highly recommend!
Phil Verheijen has been fantastic in providing advice on all matters of the lending system for purchasing my first property. I can highly recommend Phil as he is genuine and professional. Also his friendly team were extremely helpful.
Professional Lending Solutions were absolutely amazing. After several bad experiences with other brokers in the past. These guys were straight to the point, very professional, excellent customer service and got our loan approved so quickly. They provided support and advice before and after the purchase of our home.Highly recommended.
Dealing with Phil and the team at Professional Lending Solutions was amazing.Absolutely incredible communication and professional support and advice throughout.Phil was happy to answer all our questions and explained the process to us with great detail.If you ever need a good broker please do yourself a favour and see Phil. You will not be disappointed. Thanks again Phil and the team at Professional Lending Solutions. Keep up the great work.
