Low Doc Home Loans: mortgages for self employed people

Oak Laurel | Low Doc Home Loans

Get a home loans without having all the documents required to prove your income.

 

Low Doc Home Loans: mortgages for self employed people

What you need to know about low doc home loans.

Low Doc home loans are usually considered as higher risk by banks and lenders. This is because you are providing less evidence of your income. Because low doc borrowers are considered as higher risk banks usually require lower maximum Loan to Valuation Ratios (LVRs), higher interest rates (proportional to the assessed risk), and less loan features than regular (full doc) home loans.

To get a full doc loan (full documentation loan), a self-employed borrower usually needs to provide evidence of their income using a combination of:

  • Tax returns
  • ABN and/or GST registration
  • Business Activity Statements (BAS)
  • Business banks account transaction statements
  • Accountant’s letter

 low doc home loan - lo documentation mortgages for self employed people

Contact us about a low doc home loan

An Oak Laurel mortgage broker will go through your situation with you to ascertain the best way forward.

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 lo documentation home loan - mortgage for without a BAS

Missing some of your proof of income documents? Use a low doc loan instead. 

A low doc loan (short for low documentation loan) is a type of loan that can be approved that requires less documentation to verify your income. Usually you will sign an income declaration and provide your Business Activity Statement (BAS), business account statements or an accountant’s declaration to prove your income. The bank or lender will then accept these documents as proof of your income without the need to see your tax returns and other financial records.
Low doc home loans (short for low documentation home loans) are for self-employed people who cannot provide the documentary evidence required to prove their income for normal (full doc) home loans. Self-employed people are often in a situation where they do not have the required documentation for a standard (full doc) home loans.
Low doc loans require you to have some evidence of your income. Each lender has their own requirements about the documents you will need to provide to prove the income that you have declared to the lender.

The main documents that can be used to verify your income are:

  • 12 months’ BAS statements showing a high turnover.
  • An accountant’s letter verifying your income.
  • Business bank statements showing a high turnover.
  • Old tax returns (over 24 months).
  • Interim financial statements.
If you don’t have the documents required to get a low doc loan you still may be able to get a no doc loan.
Generally you can borrow up to 60% of the property value if you can provide financial statements, business bank statements, BAS statements or an accountant’s letter to prove your income. Some specialist lenders will lend you up to 80% of the property value. In some cases you may be able to borrow up to 90% of the property value if you are unable to provide full financials. However, expect to pay higher interest rates at high loan to value ratios.
Yes, some lenders will accept home loan refinances from low doc applicants. This can be an advantage if you want to escape from paying a high interest rate from another lender or want to release equity. Equity releases are available up to 80% of the property value for low doc applicants under certain conditions. Apply for a low doc loan refinance.
Yes, investment loans are available for low doc borrowers in both principal and interest and interest only payments. Apply for a low doc investment loan.
Yes, under certain circumstances bad credit low doc home loans are available. If you have mortgage arrears, defaults, discharged bankruptcy, Judgments, writs or summons you may still be able to get a low doc home loan. Apply for a bad credit low doc loan.
Yes, some lenders do not require Business Activity Statements to prove income. Many banks and lenders do require that you provide BAS statements to prove your income but we can help you to apply with a lender that does not need them. Apply for a no BAS low doc loan.
Some PAYG (pay as you go) employees are unable to provide payslips to prove their income. Though not really the same as a low doc loan, some lenders will accept alternative ways to prove your PAYG income. Apply for a home loans with no payslips.
One of our lenders will accept start-up, self-employed, companies and trusts that have been in business less than 12 months and have had a Australian Business Number (ABN) registered for at least three months, with GST registration for 1 day. Other lenders require 6 months or 24 month ABN registration.
Yes, some lenders will allow low doc construction loans under certain curcumstances.
Yes, some lenders will loan against vacant land.
Low doc home loans are designed for people who have saved a deposit or have equity in a property but cannot show documentary evidence of their self-employed income.

Low doc loans can also be used by:

Self employed people who have trouble separating their personal and business cash flows

Professional investors: This is where investing is considered as the business.

Self Employed people with a lower income in the last financial year: Many banks and lenders use the lower or average of the last two years income when assessing your loan application. This can impact on your borrowing capacity if the lower income level is a once off.

Self employed people with complicated tax or company structure arrangements: Especially if you are a high net worth individual your accountant may set up complex arrangements to protect your assets or limit your tax liabilities into the future. These types of arrangements may mean that it is difficult for staff assessing your application at the bank to understand what it means. This can cause delays or a rejection of your application.

People who have large deductions such as depreciation which are not a real expense. These types of deductions can make you tax return look like you are earning a lower income than you really are. In some cases some lenders will allow you to ‘add back’ these expenses into your income for the loan assessment purposes.

Trust structure that have distributed income to family members. This can make it look like you have less income than you really do.

Some cash based businesses have difficulty showing income to the satisfaction of the lender.

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Self-employed home loans

Low doc loans are not the only option for self employed people. Find out more about self employed home loan.

Low doc business loans

Low doc loans are are also available for business purposes. Find out more about low doc business loans.

Oak Laurel Mortgage Brokers – Low doc home loans made easy!

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