Building a home is EASY with a low doc!
In the past low doc loans were simply not allowed to be used for construction! Luckily, nowadays self employed borrowers can build their home with a licensed builder AND get a low doc loan! Even some major banks will consider low documentation loans being used to build a house.
What's the catch? Most banks will only lend for your project if you have a licensed builder with Home Warranty Insurance (HWI) or your state equivalent. Banks like to have the security offered by a formal building contract backed by insurance.
Most types of construction projects can be financed with a low doc including duplexes, four small units on one title, granny flats, weekenders and even small developments.
For owner builders it can be a little more complex. There are still a couple of lenders that may be able to help however the interest rate is likely to be higher. Owner builder low doc loans are usually limited to 75% of the total cost of the land plus your construction cost estimate.
Make your renovation a dream!
Turn your renovation nightmare into a renovation dream by cashing up with a low doc loan! If your renovation is through a contract builder you can usually get your low doc approved without too many hassles. If the renovation work is minor, cosmetic or you will DIY (Do It Yourself) then we can get you a low doc renovation loan that relies on the equity in your current property. This way you can deposit the funds into your cheque account straight away without the need for the bank to do progress inspections! By keeping control of the funds you can avoid delays, easy isn't it?
Knock down and rebuild
Banks can do knock down projects if you have plenty of equity in the land. Typically they will look at lending up to 80% of the land value plus the knock down and construction costs. If the demolition costs are significant or your new house is considered to be overcapitalising for your area then you may run into trouble! This is when we come in. As a specialist low doc mortgage broker we know which lenders are the most lenient with their construction lending guidelines.
Help! I've run out of money half-way through construction!
There is nothing worse than running out of money half-way though building your house! With a tarpaulin over the roof, your family living out of one room and a yard that looks like a war zone you really feel like you've hit rock bottom. The time when you really hit rock bottom is when you go to your bank for more money and they tell you that they will not lend for an uncompleted building contract! Ouch!
Luckily there is one major lender that will lend for an unfinished construction project with a low doc loan. Give us a call for the right low doc advice.
What documents do I need for a low doc construction loan?
Although you will not need financials such as tax returns, financial statements or notices of assessment you will still need to show the bank an income declaration and the full details of your construction project. Most banks will need the following construction specific documents:
- A copy of your building contract / Construction tender
- A copy of the stamped council approved plans (or draft plans)
- Specifications / Schedule of finishes
- Construction certificate (NSW) or Building permit (VIC)
- Builders insurance
- Builders risk insurance / Public risk insurance
Don't worry it's easier than it looks, just give us your builders details and we'll just ask him to fax it all over to us.
What are the Low Doc Loan Interest Rates for Construction Loans
For most lenders you will not pay a higher interest rate for a construction loan, even if it is a low doc loan. No doc construction loans are more limited so may have a higher rate. Everyone's situation is different so we recommend that you just talk to us to find out what rate would apply. Alternatively check out our low doc interest rates section to see the current rates.
When should you talk to us?
Please contact us approximately four weeks before starting construction. Remember that the cheapest lenders are also the most popular! If you want the best low doc construction loan then be prepared to wait a few weeks for the lender to process your application!
Bookmark this page:
Add this page to your favorite social bookmarks sites:
