Am I eligible for a low doc loan?

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adon
Posts: 50
Joined: Wed Jul 03, 2013 8:26 pm

Am I eligible for a low doc loan?

Post by adon »

Guys, I’m planning on investing in a property in Victoria. How can I tell if banks will find me eligible for a loan? I’m just looking around for a mortgage broker at the moment but I just might talk to my personal banker.

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Otto Dargan
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Re: Am I eligible for a low doc loan?

Post by Otto Dargan »

Hi adon, I suggest you try out our Low Doc Loan calculator to see if you can qualify for a mortgage and if the documents you have are sufficient.

What kind of property are you hoping to invest in?

Cheers,
Otto
Otto Dargan
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P | 1300 889 743
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adon
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Joined: Wed Jul 03, 2013 8:26 pm

Re: Am I eligible for a low doc loan?

Post by adon »

Great! I’m thinking of buying a residential property for renting out. Anything I should know?

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Otto Dargan
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Re: Am I eligible for a low doc loan?

Post by Otto Dargan »

adon,

Residential properties are probably the most preferred types property that lenders look for in a low doc investment loan application so that is a good choice for you. If your financial position is strong then lenders will also allow you special professional package discounts.

Overall most lenders will not allow you to borrow more than 80% of the property price but this will allow you to apply for loan discounts and LMI waivers, especially if the loan amount is less than 60%.

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

adon
Posts: 50
Joined: Wed Jul 03, 2013 8:26 pm

Re: Am I eligible for a low doc loan?

Post by adon »

Okay, thanks. I feel much more confident about my investment now.

alexsmith
Posts: 42
Joined: Thu Jun 27, 2013 9:16 pm

Re: Am I eligible for a low doc loan?

Post by alexsmith »

Otto, can you please explain low doc loans for me? Does it mean that I have to provide less documentation for my loan?

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Otto Dargan
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Re: Am I eligible for a low doc loan?

Post by Otto Dargan »

Hey alexsmith,

Yes a low doc or low documentation loan is where lenders require reduced proof of income to approve a loan.

This means that lenders will be happy with a Business Activity Statement (BAS), business account statements and even a letter from an accountant. The reduced requirements mean that it becomes easier for self employed who do not have payslips to get a home loan.

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

alexsmith
Posts: 42
Joined: Thu Jun 27, 2013 9:16 pm

Re: Am I eligible for a low doc loan?

Post by alexsmith »

And how much does the type of property matter here? Am I right in guessing that banks will be stricter here?

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Otto Dargan
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Re: Am I eligible for a low doc loan?

Post by Otto Dargan »

Hi alexsmith,

That is right, lenders will not accept any type of property for low doc loan applications – they want properties which can be sold quickly and are less likely to fluctuate in value.

The properties which are easiest to finance are: houses, units, townhouses, duplexes – basically, any standard type of house or apartment.

On the other hand properties which are harder to finance with a low doc loan application and the amount you can borrow are as follows:
  • Inner city apartments – 80% LVR
  • Serviced apartments – 60% LVR
  • Studio apartments – 60 to 80% LVR
  • Converted warehouse – 80% LVR
  • Island properties – 80% LVR
  • Etc.
Although lenders do not like these properties, it is still possible to finance them if you can find the right lender.

If your property falls under one of the above you may have trouble getting your loan financed. Give us a call on 1300 889 743 if you want to speak to one of our specialist brokers.

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

alexsmith
Posts: 42
Joined: Thu Jun 27, 2013 9:16 pm

Re: Am I eligible for a low doc loan?

Post by alexsmith »

Thanks for the information Otto, I will read up more about the subject before I make a decision.

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