Low doc lenders

Which lender is best for a low doc loan?

It sounds like an easy question, but it isn’t. When you are looking to apply for a low doc loan there is more than just the rate that needs to be taken into account.

You need to consider the LMI premium, the application fee (if there is one), the amount you can borrow and the exit fees! Not just that, most lenders require that you have a minimum of a 20% deposit and that you have an ABN to prove that you have been self employed for the last two years.

Don’t stop yet… You also have to consider if you want a fixed rate, variable rate, a mix of both or even a line of credit. Did you know that the best lenders for fixed rates may not be the best for variable loans?

Getting the right low doc loan is about finding the lender that can approve your loan AND give you the best deal available. As you can imagine calling every lender in Australia, waiting on hold then finding out all the details you need is an almost impossible task. Give us a call now and an experienced mortgage broker will tell you which lender is suitable for you in less than ten minutes.

Who are the low doc lenders?

Information is correct to the best of our knowledge however lenders change rapidly so please check with us for up to date information about each lender.

AMP Banking: Most of us know of AMP as an insurer, wealth management or financial planning company however AMP also has a banking licence. AMP Banking’s Low Doc Package provides 100% offset as well as a unique feature called a Master Limit.

ANZ Bank Limited: ANZ has a strong suite of home loans offered through a branch network, mobile lenders & mortgage brokers. Low doc borrower’s loans are categorised into either Lo Doc 60 or Lo Doc 80 policy. ANZ is well known for having a simplified low doc process for loans below 60% LVR (Lo Doc 60) including PAYG self verification, inclusion in their Breakfree Package and reduced valuation requirements.

BankWest: The BankWest Easy Doc Home Loan is a stricter low doc product requiring an ABN no matter the LVR. Below 60% LVR (60% of the property value) an ABN is required but with no minimum registration period whilst between 60% and 80% LVR the ABN must have been registered for at least two years and the loan must comply with PMI’s (their LMI provider) lending guidelines and location restrictions.

Bendigo and Adelaide Bank Limited: Adelaide Bank merged with Bendigo Bank in early 2008. Adelaide Bank is of more interest to us as they provided a large number of low doc loans through mortgage brokers and also re-branded as other companies such as National Mortgage Corporation (NMC), Homeloans Ltd, AFG Mortgage Management, Aussie Home Loans and Domain Financial Services. They were well known for flexible lending policy including a no LMI low doc up to 76%LVR and the ability to consider security properties such as serviced apartments which are not accepted by most lenders. Unfortunately due to changes in the cost of funding their loans they have tightened their credit guidelines and have less competitive pricing.

Bluestone Mortgages: Bluestone was originally a non-conforming lender owned by several large institutional investors and Barclays Bank from the UK. Later they diverged into commercial loans and prime low doc loans, as well as Lite Blue & Business Easy low docs for customers with impaired credit histories. In early 2008 Bluestone reduced their residential lending business due to funding constraints.

Commonwealth Bank of Australia (CBA / Colonial): The CBA is the largest home loan lender in Australia. Commonwealth has several lending business channels including their branch network, mobile lenders and mortgage brokers that offer essentially the same products under the brand name Colonial. CBA / Colonial is well known by mortgage brokers for being quite different to other banks both in processes and in assessment policies. To Commonwealth Low Doc is a policy not a product so can be included with their Rate Saver Loan (basic loan), Wealth Package (CBA), MAV Package (Colonial) or Fixed Rate Home Loan. Commonwealths LMI provider is Genworth Financial, one of the worlds largest Lenders Mortgage Insurers.

Challenger Financial Services Group: James Packer backed Challenger is a wholesale lender that offers residential and commercial low doc loans through mortgage brokers and mortgage managers such as RESI Home Loans & AMO. Challenger was formerly known as Interstar and has many of their mortgages registered under Permanent Trustees Victoria Limited. Challenger’s low doc loans tend to be less competitive when compared to the larger banks.

Citibank: Citibank has a large mortgage book in Australia which has been originated almost entirely through mortgage brokers due to the lack of a branch network. Citibank’s low doc loans are available for both Commercial and Residential properties, both for investment and owner occupied (domestic) purposes. Mortgage brokers often use Citibank for one of their credit niches, non resident loans with alternative income verification which can allow someone living overseas to buy property in Australia with only minimal income evidence. In late 2007 their low doc was one of the cheapest with a rate discount and no LMI up to 80% LVR. However due to escalating funding costs in early 2008 Citibank removed these discounts. Their low doc loan is known as the Self Certified Mortgage Plus Package.

FirstMac: Now operating in Australia for over 25 years, FirstMac has its own funding backed by securitisation as well as funding re-branded loans through mortgage managers. In 2007 FirstMac took over management of HSBC’s Australian loan book. Their LoDoc option is available on their HomeRun08 loan and X Loan, both of which are generally more expensive than the general market.

GE Money: Well known in Australia for their consumer finance, credit lines, personal loans and car loans GE Money is also a mortgage lender. GE Money is a subsidiary of the multinational giant General Electric Company. Initially in Australia GE Money was a non-conforming lender that specialised in low doc & full doc loans for credit impaired borrowers. With the acquisition of AFIG in 2004, GE Money moved into the prime lending arena by providing wholesale funding to Wizard Home Loans and a variety of other non-bank mortgage managers and originators. In 2008 GE Money was very well placed during the sub prime crisis as they were not funded by securitisation and their deep pockets allowed them to continue offering competitive low doc loans for both credit impaired and prime borrowers.

Homeloans Ltd: Homeloans Ltd was originally a mortgage manager based in Perth which then grew rapidly across Australia in partnership with mortgage brokers & mobile lenders. In recent years Challenger Financial Services has purchased a 40% stake in the business. Homeloans Ltd has diverse funding lines which have enabled it to remain a strong non-bank low doc lender.

Homeside Lending: Owned by NAB, Homeside is NAB’s broker originated home loans business. Despite being owned and funded by NAB, Homeside has significantly different credit policies and pricing. Homeside has a professional package known as the Home Plus Lo Doc which can be a combination of both fixed rates and variable rates. Their line of credit known as a Peak Performance Equity Mortgage Lo Doc allows low doc borrowers to enjoy flexible loan features along with the ability to self certify their income. Both of these loans have similar rate discounts to their fully verified income loans but do not require tax returns as proof of income.

IMB Building Society: At over 125 years old IMB is a trusted financial services provider with a strong commitment to customer service. IMB’s Lo Doc features a 100% offset account however may be at a higher interest rate when compared to other loans on the market.

ING Direct: ING is Australia’s 6th largest home loan lender which is quite impressive considering that ING’s loan book was primarily introduced by mortgage brokers as they have no branches. ING’s Lo Doc Smart Loan and Lo Doc Standard Variable Loan are priced around the bank standard variable. Because of this ING is not a major low doc lender even though they are renowned for a high level of customer service & excellent pricing on their fully verified income loans.

Not sure which lender is suitable for you? We’ll find you a lender and arrange your loan for free!

LaTrobe Home Loans: Although the general public haven’t heard much about La Trobe they are well known amongst professional investors, developers and mortgage brokers. This is because their Lite Doc loan can be used for both prime and credit impaired borrowers, and can be used for small low doc development loans. Watch out for high exit fees!

Liberty Financial: Established in 1997 Liberty is known as the founder of non-conforming and specialist lending industry in Australia. Their low doc loans, known as Nova or Private, are designed to cater for good quality customers that don’t fit the banks normal lending guidelines. Their rates are generally higher than the banks however they are far more flexible with their lending policy.

Origin: Owned and funded by ANZ Bank, Origin is a wholesale lender that distributes its loans through mortgage managers such as MAS. Origin’s low doc credit policies are similar to ANZ’s, however their loan names, fees and interest rates vary between different mortgage managers.

NAB (National Australia Bank): As one of the four major banks NAB has been a favourite for many Australians. The NAB Tailored Home Loan Variable & Fixed Rate or the NAB FlexiPlus Mortgage are all available as low docs. Even though Homeside Lending is funded & owned by NAB it is often cheaper to obtain a Homeside Lo Doc through a mortgage broker than a NAB Low Doc through the branch network. This is because NAB is more of a business focused bank rather than a consumer bank and has decided that low docs should not have the same rate discounts as full doc loans.

Paramount Mortgage Services: Paramount is a non-bank mortgage manager and originator funded by La Trobe Financial and other lenders. Specialising in Low Doc Owner Builder and short term development loans, Paramount is well placed to help borrowers unable to obtain a home loan through another lender. Their Low Docs are named the Lo Doc Select and Lo Doc Owner Occupied.

Pepper Home Loans: Pepper is a non-bank lender specialising in lending to customers that have been unable to obtain a loan through their bank. With the ability to consider low doc applications from people with unlimited defaults and court judgements on their CRAA (Credit file), Pepper can help when the banks can’t. Traditionally banks tend to be very conservative when assessing low doc loans for customers with defaults even when there is a good reason for the default or the customer has a lot of equity.

Rams Home Loans: Shortly after listing on the ASX in 2007, Rams ran into financial trouble. In an effort to save the company the brand was sold to Westpac in early 2008. Rams has always been a favourite for low doc loans and now with the additional support of Westpac’s funding has released new innovative low doc home & investment loans available through mortgage brokers & Rams franchisees. In particular Rams has several credit guidelines which allows them to approve some types of low doc loans that other lenders cannot consider. Their Low Docs are known as the Rams Self Employed Pro Pack, Smartway Low Doc & Rams Low Doc 500 Plus.

The Rock Building Society: Based in Rockhampton QLD, the Rock has operated through mortgage brokers across Australia. Unfortunately The Rock is not particularly competitive with low doc loans as their management do not discount their low doc interest rates. Unlike many other lenders The Rock does not have an exclusive agreement with one LMI provider so can approve loans that meet either PMI or Genworth policy.

St George Bank: As the fifth largest home loan lender, St George Bank (SGB or StG) is known for a higher level of service when compared to the other large banks. St George is quite different to the other banks as its own mortgage insurer St George Insurance (SGI) has unique credit guidelines. This means they often approve low doc loans the others would decline, and in some cases decline loans the others would approve! St George’s Low Doc Home Loan and Low Doc Portfolio Loan are eligible for the Professional Benefits Package but not St George’s Advantage Package which is only available for fully verified loans. The Professional Benefits Package generally does not allow for the application fee to be waived or for full doc interest rates to be matched.

Suncorp-Metway: Australia’s fifth largest bank behind the four majors, Suncorp is a diversified company with banking, commercial and insurance businesses. Suncorp has always been a relatively strong low doc provider, focusing on distribution through its numerous QLD branches and nationwide through mortgage brokers. Several of their loans can be processed as a low doc, including their Standard Variable Rate (SVR), Back to Basics, Fixed Rate, Asset Line and Small Business loans.

Westpac Banking Corporation (WBC): Westpac is one of Australia’s four major banks and is well known for being a strong player in the low doc market. With its own LMI provider Westpac Lenders Mortgage Insurance (WLMI), the bank has been able to introduce its own low doc policies which are significantly different from the other banks. Their Rocket Repay Low Doc, Premium Options Low Doc, Fixed Options Low Doc and Equity Access Low Doc can all be priced under their professional package known as the Premier Advantage Package or PAP for short. Although their LMI is generally more expensive and they tend to charge a small low doc LMI fee, Westpac is still a favourite amongst mortgage brokers due to some unique low doc policies. Westpac is also considered by many to be one of the least flexible banks when it comes to considering exceptions to their lending policy. If a loan is outside policy then usually it is declined, even if there are strong reasons to approve the loan anyway.

Which lenders DO NOT do low docs?

First Permanent Financial Services: A subsidiary of Merrill Lynch Investment Bank, First Permanent is a specialist lender that focuses on funding 100% to 106% loans (Establishment Loan and Investor Loan) for borrowers with a good income but with no savings. As you can imagine 100% loans are too risky for lenders to approve without obtaining full evidence of their borrowers income and as a result First Permanent does not have a low doc loan.

Heritage Building Society: Heritage is one of the largest Building Societies in Australia however never decided to enter the low doc market. Their view is that low doc loans are too risky and so they have focuses on flexible fixed rate loans and a discounted basic loan full doc borrowers. Although many disagree with this view heritage has repeatedly stated that they are not interested in funding low doc loans.

Maxis Home Loans: Maxis is a lender focused on offering low fee home loans with a higher level of service. Their market is predominantly in the full doc arena and so they have no low doc loans available.

Macquarie Bank: Macquarie has funded loans through its retail division and also with wholesale lending (The PUMA programme) re-branded as non-bank loans through lenders such as Aussie Home Loans. In 2008 Macquarie announced that it would greatly reduce its new lending, focusing mainly on servicing loan increases for existing customers. As such for new borrowers there are no new low doc loans available. Macquarie’s existing low doc loans are known as Express loans and tend to have a higher interest rate when compared to the rest of the low doc market.

RHG Limited: RHG is the entity formerly known as Rams. When the brand was sold to Westpac in 2008, Rams changed its name to RHG. No new loans are being originated, and as such RHG exists to service its existing customers rather than to compete with the rest of the market for new loans. Because of this RHG has no low doc loans on offer.

If your lender can’t help you with a low doc then call us to find one that can!