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What is a low-documentation loan?
The term “Low Doc” home loan can mean different things depending on the lender you are dealing with. The term was commonly used before the 2008 Global Financial Crisis (GFC) to refer to a mortgage that required less information than a ‘standard’ home loan to prove the applicant’s ability to repay the loan.
Following the GFC, national consumer credit protection legislation was introduced which stated that loans with low levels of documentation did not meet these credit requirements and were therefore no longer offered to consumers.
Incomplete documentation? We can still do it
If you are self-employed or a small business owner and do not have the necessary documents for a standard home loan application, you may have heard about low-cost home loans and options that require minimal paperwork. Let’s explore the history of this product, why it is no longer available and a new solution that can help.
What is an Alt Doc home loan?
Alternative documentation home loans still require supporting documents and meet all our credit scoring criteria, but the documentation we require is tailored to a wider range of financial circumstances and meets today’s lending standards.
Alt Doc loans are a solution for Australia’s army of self-employed individuals who may not meet the usual loan application requirements or who do not have the extensive ABN history and documentation that some conventional lenders require.
Low Doc and Tax-Free Home Loans
A loan with low or no documentation is usually suitable for self-employed borrowers. Generally speaking, it is probably the only way you can borrow if you do not have up-to-date tax returns or financial statements. It is important to note that the term “low doc” means an alternative type of supporting documentation, not less of it.
Whether you’re looking for a low-doc home loan or a personal loan, if it fits, we’ll find it.
- Traditional home loan types and low-doc loans
- An applicant for a low-doc home loan will have a slightly higher interest rate.
You are not required to submit company financial statements in the same way as other home loan applicants.
You get a maximum LVR low-doc home loan, which means you can usually borrow up to 80%, although some lenders will lend up to 90% depending on your eligibility criteria.
Low-doc loan lenders will accept an income declaration that proves the applicant has the ability to repay the loan.
Contact our specialist advisors and get approved for a low-doc loan.