Buy your home with a low doc!
If you are looking to buy a new home it is better to get the right home rather than the one your bank says you can afford based on outdated tax returns! If your income is good and your business is strong then why not use a low doc loan to purchase your new home?
Because of the reduced paperwork you can get an approval faster and you can usually borrow up to $1,000,000 (or more) without too many hassles.
Can I get a low doc pre-approval?
Yes, Low Doc loans are eligible for pre-approvals, depending on the lender. Some lenders use the term homeseeker, conditional approval or conditionally eligible to describe a pre-approval. Typically a Low Doc pre-approval will last three months, if you don't buy a property in this time your pre-approval will expire and you will have to apply again!
Some lenders have FREE Low Doc pre-approvals which last for as long as one year, giving you adequate time to go house hunting!
Low docs for first home buyers
First home buyers can obtain a low doc loan just like any other home buyer. Some restrictions may apply as first home buyers tend to have lower deposits and less assets. Because of this we usually select lenders with cheaper LMI premiums and less stringent asset requirements. Applying for a low doc loan will not affect your eligibility for the first home owners grant (FHOG).
How much of a deposit is needed with a low doc?
The major banks and most other large low doc lenders will not lend you more than 80% of the purchase price, requiring you to come up with the other 20% as well as stamp duty. As a rough guide first home buyers will need 20% of the purchase price while investors and 2nd home buyers will need 25% of the purchase price as a deposit. The additional 5% for investors and 2nd home buyers is to cover stamp duty, conveyancing fees and other costs associated with buying a property.
Lenders prefer if your deposit is saved however most will accept a gift from your family or proceeds from the sale of an asset such as another property, a car or shares. Some lenders will decline your loan if your deposit is borrowed! So be careful, talk to us if your deposit is borrowed, even from family, and we can help you apply with a lender that doesn't mind.
We have lenders that can lend up to 90% of the purchase price as a low doc loan. These loans are more expensive so we suggest that you provide as large a deposit as you can!
Family guarantees and low doc loans
Family guarantees also known as fast track guarantees, family pledges or family equity loans are not available for low doc loans! We often recommend that if you don't have a 20% to 25% deposit then you can ask your family to borrow in their name and lend the money to you for you to use as your deposit. We recommend that you obtain legal advice before proceeding with this structure and always secure the loan with a formal loan agreement and caveat.
This is a simple way for first home buyers or other purchasers without a deposit to buy a property.
Low Doc lender guidelines for purchases
If you are buying a home with a low doc loan the lender will usually investigate the source of your deposit, requiring saving statements, share trading statements or a gift letter to confirm the exact source. This is the most distinct lender guideline for purchases.
Besides this, normal ABN, asset and age of business requirements apply. For the full details of low doc lending criteria refer to our FAQ section.
What are the Low Doc Loan Interest Rates for purchases?
You can find these in our Low Doc Interest Rates section. Keep in mind that the loan with the lowest rate isn't always the best loan! Call us to discuss other factors that might affect the cost of our loan such as fee waivers, LMI premiums and exit fees.
How do I apply for a Low Doc Loan pre-approval?
We are specialists in Low Doc Finance and can help you find the right lender. Just go to our Apply for a Low Doc Loan section and send us your details. We'll be in touch with a few competitive quotes and can obtain a quick pre-approval for your purchase!
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