Low doc Home Loans
What is a low doc loan?
A low doc (low documentation) home loan is a type of home loan that can be approved without the requirement for standard income verification.
The main reason to use a low doc home loan is because you don’t have standard income verification documents to prove your actual income.
This can stem from various reasons, including:
A big growth in business since the last tax return.
Up-to-date tax returns is not lodged.
The distribution of income to family members through a trust.
Complex business structures.
Cash income, e.g restaurants, tradies
Through low doc loan application, you sign an income declaration and provide evidence, usually in the form of BAS (Business Activity Statements), business account bank statements, or an accountant's statement, to support the declared income. Your lender will accept these documents as proof of your income.
Who Qualifies for Low Doc Loans?
Low doc loans are generally available to self-employed borrowers. You usually need a valid ABN, which should have been active for at least two years and registered for GST. Some lenders even accept ABNs that have been registered for just one day.
Some of our specialized lenders may consider loans that exceed 80% of the property's value and are open to borrowers with a history of late payments or defaults on their credit records.
Case Study
David wanted to get cash out through refinancing and use it as a deposit to purchase an investment property.
He is a self-employed contractor but has not yet lodged a full tax return.
Loan Amount: $500,000 (refinancing) + $350,000 (extracting new funds)
Loan-to-Value Ratio: 80%
Annual Income: $220,000
Solution: A low doc loan was the solution, considering the substantial cash outs.
Where can I get an income Declaration Form?
Each bank has its own version of this form, so it can vary. Generally, the form will ask for your name, your business name, your business's ABN, the loan amount, and how much you'll likely repay. You'll also need to confirm that the income you're declaring is accurate and that you can manage the loan payments.
Our brokers are specialists in low doc loans and can guide you find the right lender for your loan application. Just send us an free enquiry or call us at 1300 965 688 to speak to one of our expert brokers.
Need Expert Advice? Contact Loanbox!
Making the right choice can save you money and help you achieve your financial goals sooner. If you're unsure which option best suits your needs, the team at Loan Box is here to help. We can provide personalized advice based on your specific situation.