If you're interested in seeing what kind of mortgages are available for self employed individuals, one option to consider is a low doc loan.
A low doc loan is a streamlined type of loan for people who may have the income and assets, but are unable to provide the required financial statements and tax returns. The basis of these loans is rooted in the applicant declaring their own income derived from their business, making these products the perfect option for thoselooking for self employed home loans.
For the self-employed, we will require either a letter from your accountant, a bank statement showing your business income and expenses or a business activity statement (BAS) as evidence of a reliable income. S and P Finance specialise in helping the self employed secure, cost effective low doc home loans for personal or investment purposes. We offer a wide range of products, providing solutions for all different walks of life - including low doc home loans worth up to 85 per cent of your property's value with a choice of flexible supporting documents.
S and P Finance can offer a range of highly competitive low doc home loans suitable for a variety of purposes including:
Choice & flexibility in documents provided, including NO BAS, and NO bank statements options.
Loan products with no mortgage insurance.
Loans for the payment of tax debt.
Flexible self employed low doc loans for commercial purchases and refinances.
Specialist low doc loans for applicants with a less than perfect credit history.
Loans for property purchases and transfers
Refinances with unlimited equity release.
Refinance and debt consolidation (including credit cards, personal loans, car loans, etc)
Loans suitable for business expansion or to replace costly overdrafts.
Loans suitable for companies and trust applicants.
Qualifying For a Low Doc Home Loan
There are three requirements that need to be fulfilled before you can consider applying for low doc home loans in Australia:
You need to be self employed with an active Australian Business Number (minimum of six months old, preferably 12 months)
You need to provide either an accountant's letter or a business banking statement or a business activity statement
You need a minimum deposit or equity worth 20 per cent to put towards your home
How will my Loc Doc Loan be Assessed?
Most lenders look for the following key attributes on your low doc home loan application to determine your eligibility for the loan.
These key points are outlined below: Self-Employed History – Your ABN is a key determinate lenders use to ascertain your length of self-employment. The longer your ABN and GST registration history the better, as it demonstrates your longevity and consistency as a self-employed business person.
Credit History - Your credit history is very important, the lender is relying on your past credit performance in ascertaining your eligibility for new credit. Whilst minor telco defaults and judgments can be accepted a clear or ‘clean credit’ history is the most favorable. In general the age of the default is considered, the older the default the better, as it is more favorable to the applicant if a long time period has passed since the default incident has occurred.
Deposit or Equity Contribution - generally a minimum of 20% is required from the applicant(s) for a purchase or refinance. The maximum loan to value ratio (LVR) is generally 80%, although we do have a low doc loan product that will allow up to 85% for a purchase transaction.
Net Asset Position – Your overall net asset position reflects the financial strength of your application. This is your gross asset values minus your current liabilities. The higher this figure the better.
Repayment History – When you apply for a low doc loan you may be asked to provide a recent statement on any existing mortgages. This is to demonstrate that you are making the obligated payments on these debts and that they are being managed within your credit limits. For refinance transactions it is a standard requirement that you provide 6 months statements for your existing mortgage(s) to be refinanced and generally 3 months statements for any other debts you wish to consolidate (or pay out) from the proceeds of the loan.
Property Location – This is a key determinant when applying for a low doc loan. Lenders rely more heavily on the location of the property in assessing their risk when lending under a low doc arrangement as they are not relying as much of the applicants income evidence. Most metropolitan property will be considered up to maximum loan to value ratios, whilst regional property will often be considered at lower loan to value ratios.
Maximum Loan Exposure – Lenders have prescribed limits for the self employed borrower segment. This is to keep the lenders risk exposure at a comfortable level. The most common maximum exposure per borrower group is $2.5m (i.e. a couple's total borrowings combined) or generally $1 million per loan.
Equity Release – Or ‘cash out’ as it is often referred is where an applicant is seeking to refinance an existing debt and obtain further funds. Some lenders limit or require evidence for the purpose of the cash out when applying under a low doc borrowing arrangement. Most of our products permit unlimited cash out.
Why Choose S & P Finance for Low Doc Loans?
We are specialists in low doc home loan solutions. Our market-leading, flexible low doc loan solutions are popular amongst many self-employed business people who are after a hassle-free and effective loan solution to help them get onto the property ladder without letting their past defaults hold them back. Low doc loans are one of S & P Finance's core offerings, making the team here specialists in providing funding for people that qualify. If you think that your situation might warrant a low doc loan, then make sure to get in touch.
Talk to us today about the best low doc loan option for your unique circumstances.
Low doc loans can be used for commercial or residential purchases.
Call S & P Finance | 1300 110 241 | Hunter Valley | Newcastle