No BAS low doc
Not all lenders need BAS statements!
In early 2009 most low doc lenders only required an income declaration as proof of income for low documentation loans. However, due to the Global Financial Crisis (GFC), lenders began to be allot stricter with documents required to prove income and started to ask for BAS statements also.
On the 1st January 2011 almost all of the lenders in Australia tightened their low doc loan lending policies by requesting Business Activity Statements (BAS) for all new applications.
This was due to the tightening of the National Consumer Credit Protection (NCCP) regulation; as such lenders are now required to obtain a minimum of 12 months BAS statements, as part of the updated “responsible lending” requirement.
So is it possible to get a low doc loan without BAS statements? Yes!
There are a select few lenders that have been able to find a loop hole in this regulation, and in many cases the rate is actually lower than the Bank Standard Variable (BSV) rate!
What are the lenders guidelines?
Ever lender has different requirements when it comes to guidelines and required documents.
However, most are of the rule that to qualify for a loan you must meet the following criteria:
- Your ABN and GST must be registered for a minimum of 2 years.
- Your credit history must be clear of any adverse listings and you must be paying your current debts on time.
- You must provide 12 months BAS statements
- You must be borrowing 80% or less of the property value.
- If borrowing over 60% of the property value (LVR) you may have to prove Genuine Savings.
- 1 year old ABN: You can borrow up to 60% of the property value at a discounted interest rate or up to 80% with a very select number of lenders. In some cases we can lend 85% although the rate will be significantly higher & approval criteria is strict.
- More than 2 years old ABN: Normal policy applies. You can borrow up to 80% of the property value at discounted interest rates.
What if my ABN & GST is not 2 years old?
How much can you borrow without providing any BAS?
First home buyer / Home loans: 80% of the property value.
Investor / Investment loans: 80% of the property value.
Refinances: 80% of the property value (restrictions apply to equity releases).
Please note that only a select number of lenders are able to provide this product.
What if I apply with a lender that needs BAS statements?
If you decide to apply for a lender that requires BAS statements then you will need to provide your last 12 months BAS statements issued from the ATO, not your copy sent to the ATO. You can print these off from the Tax Office’s BAS portal or by asking your bookkeeper.
The lender will usually look at the turnover of your business during the last year as shown on your Activity Statements and assume your income to be the lesser of 40% of your turnover or the income you declared. Consultants and other business types that have low expenses may be able to declare an income as high as 80% of their turnover.
In other cases lenders may also ask for 3 – 6 months business bank statements or evidence of genuine savings to assist in their assessment. Lenders may also ask for other documents such as your annual GST return or evidence that your quarterly GST bill has been paid by the due dates.
Talk to a low doc loan specialist
Please enquire online to talk to a specialist mortgage broker that knows how to get a competitive low doc loan without the need to show your BAS statements!
