Help! My bank won't let me borrow more than 80%!
That's right, banks are limited by their mortgage insurers as to how much they can lend. As a general rule they just can't approve loans over 80% of the value of your property!
Luckily banks are not the only lenders in Australia that can allow you to self certify your income without providing tax returns.
85% Low Doc
Yes it is possible to borrow more than 80% LVR! However don't expect to get the same interest rates offered by the major banks. You can pay an interest rate anywhere from 0.5% to 1.5% more than you would pay when applying through a bank.
This is not a long term loan, although the term is 30 years, you should aim to reduce the loan down to 80% and refinance it as soon as possible. This type of loan is ideal for anyone consolidating debts, purchasing a new home or investing in a high growth area.
90% Low Doc
Borrowing as much as 90% LVR is possible with a low doc loan, although it can be prohibitively expensive. Only the bravest of lenders are willing to approve loans with no income evidence and a smaller deposit.
Our recommendation is to only apply for a 90% loan if you have either no other choice or if you have found a property that is a fantastic investment. Otherwise the cost of the loan just doesn't justify the benefits. Read on to find out about the other options...
No Deposit?
There are no lenders able to offer no deposit low doc loans. Sorry, you'll have to save a deposit or complete your tax returns to be able to buy a property. Read on to find out the other way you can still buy a property...
So how do I buy a property with no deposit?
Many people have had no deposit but have still been able to buy a property with a low doc loan. How did they do it?
Your parents can obtain a loan using their home and then lend it to you as your deposit. You can then make payments on both loans and in time increase your loan to pay them out completely. This is a simple arrangement that works effectively for many first home buyers.
Over 60% of first home buyers obtain some help from their parents, so don't feel bad about asking your parents for help. Many banks will decline your low doc loan if you have borrowed your deposit or received a gift from your parents. Only a select few lenders do not require you to save a deposit.
Talk to us, the Home Loan Experts, to find out which lenders don't require genuine savings for their low doc loans. We recommend that you and your parents obtain independent legal & financial advice before they lend you money for you to use as your deposit.
LMI & risk fees
Lenders Mortgage Insurers (LMI) tend to be very restrictive with high lend low doc loans. As a result many lenders charge a risk fee instead of obtaining LMI. What does this mean for you?
Basically you still pay a once off fee when the loan is set up. The name has changed however the overall effect is the same. Risk fees vary between lenders so be sure to shop around to get the best deal!
Apply for a 85% / 90% low doc
Contact us, the Home Loan Experts, to find the lender right for your low doc loan! We'll help you choose a competitive loan from our panel of specialist low doc lenders.
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