Low documentation (low doc) home loans work well for self employed borrowers for buying residential, investment or commercial property.
Pricing and credit criteria varies significantly between lenders, so it’s important to understand the options available to you.
Many Australians enjoy the freedom of working for themselves, but being self-employed means your time can be tight, not to mention the challenge of keeping up with the paperwork of running your own business. Many self-employed borrowers talk to a mortgage broker instead of a bank because they want a wider range of home loan options. Having a Loan Market mortgage broker onside is like having your own personal finance expert to help you secure a competitive home loan with the right lender.
- Simplified paperwork
- A flexible application process
- A competitive interest rate
- Access to equity for your business/personal and investment finances
If you’re self-employed and want to fund business growth or finance a new business initiative but have a fluctuating income then a low doc loan might work for you. You’ll need your ACN/ABN, last 12 months Business Activity Statements (BAS) and your latest account statement to get started. Low doc loans can be used to buy residential, investment or business property. But there are some conditions attached to low doc home loans, so it’s important you understand what you’re getting into. There’s a lot to think about, like how to make repayments with a fluctuating income and how to get home loan pre-approval. You might choose a line of credit mortgage rather than a standard home loan to cover your business needs as well. Some lenders may also want you to take out Lenders Mortgage Insurance (LMI) for a low doc loan with an Loan Value Ratio greater than 60 per cent, but your mortgage broker will help you negotiate a competitive home loan interest rate with a range of features to suit your needs. Depending on your lender, you might be required to supply one or more of the following:
- 12 months worth of Business Activity Statements (BAS)
- An Australian Taxation Office (ATO) Lodgement Reference Number
- Account statements for the past 3 months, showing taxation payments