Are no doc loans not offered anymore?

Share your concerns & ideas about commercial property loans in Australia.
batman
Posts: 11
Joined: Thu Mar 12, 2015 5:54 pm

Are no doc loans not offered anymore?

Postby batman » Fri May 22, 2015 7:23 am

Good morning experts,

My dad’s an artist and he says he never had a fixed job or regular salary. He’s been earning through the sale of his paintings instead. He says that he took out a no doc loan to buy his current house 15 years back.

I’m also an artist like him and I’m doing good for myself since the last few years. I thought of buying a retail store space to sell my paintings so I called a few banks to know more about no doc loans.

However, they said that no doc loans aren’t available anymore. What happened?

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Otto Dargan
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Re: Are no doc loans not offered anymore?

Postby Otto Dargan » Fri May 22, 2015 9:11 am

Hi and welcome to the forums batman.

The mortgage market has changed drastically because of the Global Financial Crisis (GFC) which peaked in Australia around mid-2007.

Before the GFC, there were many lenders who offered specialised loans to meet the needs of those who could not meet the standard lending criteria. One of such specialised loans were no doc loans.

When the GFC hit Australia, Reserve Bank of Australia (RBA) introduced tighter lending policies, due to which, lenders threw out no doc loans.

However, you can still get a no doc loan through some specialist lenders.

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

batman
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Joined: Thu Mar 12, 2015 5:54 pm

Re: Are no doc loans not offered anymore?

Postby batman » Fri May 22, 2015 10:14 am

Oh, so that's what happened :|. I had no idea about the GFC but it’s good to know that some lenders still offer no doc loans. How much can I borrow?

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Otto Dargan
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Location: Sydney, Australia
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Re: Are no doc loans not offered anymore?

Postby Otto Dargan » Fri May 22, 2015 2:21 pm

Hi batman,

You may be able to borrow:
  • 60% of the property value through larger second tier lenders at competitive interest rates.
  • 75% of the property value through smaller lenders at higher interest rates.
  • 80% of the property value, however, you can only obtain short term caveat loans, typically at an expensive interest rate.
It should be noted that you may not be able to borrow more than one million dollars.

It should also be noted that these lenders offer no doc loan mostly based on the strength of the property itself and not your income. They are very particular about the property and prefer it to be:
  • In a good location.
  • In good condition.
  • Larger than 50 meter square for a unit or under two hectares for land.
  • Readily saleable.
Offices, factories, warehouses and retail may be acceptable for a commercial no doc.

You can go through our website to learn more about no doc loans. If you want to speak with a broker directly, then you can give us a call on 1300 889 743 or you can fill in our free assessment form and one of our brokers will contact you instead.

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

batman
Posts: 11
Joined: Thu Mar 12, 2015 5:54 pm

Re: Are no doc loans not offered anymore?

Postby batman » Sun May 24, 2015 3:21 pm

Thanks for taking the time to reply, Otto. I was going through your website in the morning and I’ve also filled in the assessment form. I think I’ll be talking to one of the brokers tomorrow. Thanks again!

clarke
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Joined: Mon Mar 16, 2015 6:42 pm

Re: Are no doc loans not offered anymore?

Postby clarke » Fri Jun 12, 2015 1:43 pm

Hey there,

I’ve been thinking of taking out a no doc loan through a private lender but I’ve heard that the interest rates are very high.

Does anyone here have an idea on how to deal with this particular problem?

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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: Are no doc loans not offered anymore?

Postby Otto Dargan » Fri Jun 12, 2015 4:32 pm

Hi clarke,

There are several private lenders that fund no doc loans. Most of them operate through a specialist mortgage broker and are far more expensive than the major lenders in Australia. The interest rates may be up to 6% per month, which is up to 72% per annum.

That’s why no doc loans aren’t normally designed to be for a long period of time. In most cases they have a term of six to twelve months.

One of the way out of the no doc loan is getting a refinance using a low doc loan, given that you can meet all the requirements of a low doc loan.

It should be noted that if you’re going through a mortgage broker, then they’ll charge you a fee to arrange your no doc loan because most private lenders don’t pay them any commissions.

It is strongly recommended that you use a no doc loan only as a last resort and that you obtain legal and financial advice before signing the loan agreement.

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

clarke
Posts: 7
Joined: Mon Mar 16, 2015 6:42 pm

Re: Are no doc loans not offered anymore?

Postby clarke » Fri Jun 12, 2015 6:44 pm

Thanks for the heads up, mate! I’ll keep that in mind. I was thinking of going directly to a private lender without the help of a broker but now it feels that it’s better to consult one. I’ll give you a call next week to discuss my situation. Cheers!


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