Hello Zachariah. Welcome to the forums.
Low doc loans
are designed specifically for self-employed borrowers such as yourself who do not meet the stringent income verification documents required such as 2 years’ tax returns including the Notice of Assessment (NOA), two years financial statements, and in some cases, BAS statements as well. With a low doc, you provide reduced income evidence in the form of 12 months Business Activity Statement (BAS), Business Account Statements or an accountant’s letter.
These are some of the potential issues you need to be aware of with low doc loans:
- Higher interest rates: Low doc interest rates will depend on the lenders you qualify with and what sort of verification or supporting documents that you’re able to provide. Some of our lenders offer the same rates as they do for full doc loans.
- Larger deposit: Lenders generally require a 20% of the purchase price as a deposit for low docs.
- Lenders Mortgage Insurance (LMI): If you borrow over 60% Loan to Value Ratio (LVR), LMI is generally applicable for low docs. Some will consider lending up to 80% LVR. One of our lenders will consider a 90% low doc loan.
Major lenders no longer approve low doc loans that are used to refinance an existing home loan. Thankfully, some lenders will still refinance a low doc loan.
Speak with one of our specialist mortgage brokers by giving us a call on 1300 889 743
or fill in our free assessment form
to find out if you qualify for a refinance to purchase an investment property.