Is it possible to get a better rate with a low doc loan?

Any general questions you might have in regards to loans and finance.
Angela75
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Is it possible to get a better rate with a low doc loan?

Postby Angela75 » Fri Mar 08, 2019 11:42 am

My husband and I both left our office jobs to start our own restaurant. We opened our door to customers last year and it has been super busy for us. The restaurant is doing quite well and we're looking to refinance our home at a better rate. We have about a 100k equity in the house. Is it possible to get a better rate with a low doc loan?

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Otto Dargan
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Re: Is it possible to get a better rate with a low doc loan?

Postby Otto Dargan » Fri Mar 08, 2019 12:35 pm

Hello Angela. Welcome to the forums.

Self-employed borrowers such as yourself will know from experience that banks see you as a higher risk and tend to be more conservative when assessing your loan application.

Due to the nature of low doc loans, lenders often charge a slightly higher interest rate.

You can go to our interest rates page on our website and view the low doc section.

The interest rate of a low doc also depends on what Loan to Value Ratio (LVR) you’re borrowing at.

You can:
  • Borrow up to 90% of the property value with one of our lenders (higher interest rates apply).
  • Borrow up to 80% of the property value with competitive interest rates (a risk fee might apply)
  • Borrow up to 60% of the property value with standard home loan rates.
  • The bigger the deposit or your equity the better the interest rate will be.

Give us a call on 1300 889 743 or fill in our free assessment form to find out if you qualify for a low doc loan with a highly competitive interest rate.

Cheers,
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

Angela75
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Joined: Fri Mar 08, 2019 11:40 am

Re: Is it possible to get a better rate with a low doc loan?

Postby Angela75 » Fri Mar 08, 2019 1:58 pm

I would just like to clarify a few things first. We’ve paid down our loan to our current LVR of 80%. If we went with a low doc loan, you mentioned risk fees may apply. What's a risk fee exactly?

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Otto Dargan
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Re: Is it possible to get a better rate with a low doc loan?

Postby Otto Dargan » Fri Mar 08, 2019 2:32 pm

Hi Angela,

Some lenders effectively self-insure their loans by charging a risk fee instead of obtaining Lenders Mortgage Insurance (LMI).
This just means there is no external mortgage insurer, you'll still be paying a fee similar to LMI.

Not all low doc loans have the same LMI premium rates, the same can be said of risk fees. They tend to vary between lenders and go by a variety of names.

Cheers,
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

Angela75
Posts: 4
Joined: Fri Mar 08, 2019 11:40 am

Re: Is it possible to get a better rate with a low doc loan?

Postby Angela75 » Fri Mar 08, 2019 3:14 pm

Yeah. We don’t have our tax returns yet, is an accountant’s declaration letter enough?

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Otto Dargan
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Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
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Re: Is it possible to get a better rate with a low doc loan?

Postby Otto Dargan » Fri Mar 08, 2019 4:16 pm

Hi Angela,

As an alternative to Business Activity Statements (BAS), there are some lenders who accept an accountant’s letter instead.

This letter acts as a guarantee of the accountant’s knowledge of your circumstances at the specified date. It is only valid for 60 days from the date mentioned.

Give us a call on 1300 889 743 or fill in our free assessment form to find out if you qualify for a low doc loan using an accountant’s letter.

Cheers,
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

Angela75
Posts: 4
Joined: Fri Mar 08, 2019 11:40 am

Re: Is it possible to get a better rate with a low doc loan?

Postby Angela75 » Fri Mar 08, 2019 6:42 pm

I’ve filled up the online assessment form. Give me a call and let's talk interest rates :)


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