Navigating Low Doc Home Loans: A Tradie’s Quick Guide to Financing in Australia
Getting a home loan can be challenging for tradies, particularly when they haven’t been in business for very long. Good thing there are low doc home loans that tradies can turn to when they’re planning on buying their own home.
These days, financial institutions seem to require even bigger piles of paperwork and mountains of documentation to prove financial capacity. Low doc home loans have emerged as a beacon of hope for tradies and other self-employed individuals since these loans are designed for those who might not have the traditional documentation required by lending organisations. These loans offer a flexible solution to the financing needs of those who are running their own businesses.
What are Low Doc Home Loans?
Low doc home loans, short for “low documentation home loans,” are a type of mortgage tailored for individuals who can’t provide the usual proof of income that standard loans demand. Unlike the more stringent requirements of regular mortgages, low doc mortgage options cater to those with irregular income streams, such as tradies or self-employed persons.
Why Low Doc Loans are Popular Among Tradies
For tradies, the nature of their work often means fluctuating incomes, making it challenging to provide consistent proof of earnings. This is where low doc loans come into play. They offer a more straightforward application process, eliminating the need for extensive documentation like payslips or tax returns. Instead, other forms of verification, such as bank statements or a declaration of income, are used.
Eligibility Criteria for Low Doc Loans
To qualify for low doc home loans, certain criteria must be met. While these can vary among lenders, common requirements include:
- Proof of Australian Business Number (ABN)
- Evidence of GST registration
- A declaration of income
- Business bank statements or BAS returns or Accountant declaration
It’s essential to note that while low doc loan requirements are less stringent, they don’t equate to no requirements at all.
Advantages and Disadvantages of Low Doc Loans
Now, low doc home loans come with their set of pros and cons. On the upside, they offer a solution for those who might not qualify for standard loans due to lack of documentation. They’re especially beneficial for tradies with irregular incomes or those who’ve recently ventured into self-employment.
On the downside, low documentation mortgage loans might come with slightly higher interest rates, reflecting the perceived higher risk associated with less documentation.
How to Apply for a Low Doc Home Loan
The application process for low doc loans is relatively straightforward. It usually starts with you researching lenders who offer these types of loans. When you’ve found these options, you will then gather the necessary documentation for it. This can include business bank statements, a letter from an accountant, or evidence of ABN and GST registration. Submitting a well-prepared application increases the chances of approval.
The easier and quicker route is to ask for the help of a mortgage broker. With these professionals on your side, you gain access to the information you need without having to go through the tedious and time-consuming task of researching everything – from lenders who allow low doc home loans to their respective requirements to their terms and offers. With an experienced mortgage broker, like the ones here at Professional Lending Solutions, you get the information and advice you need.
Let Professional Lending Solutions Help You Out
Low doc loans offer a viable financing solution for Australian tradies, bridging the gap between traditional loans and the unique financial situations of those with irregular incomes. Our expert mortgage brokers here at PLS understand the ins and outs of these loans and can assist you in making informed decisions and securing the financing needed to buy your own home. To find out more about low doc home loans, don’t hesitate to contact us.