If your business has grown to the point where your tax liabilities are making their mark, then maybe you should talk to your accountant about negatively geared investments.

Unlike in the past, modern low doc investment loans have lower rates, lower fees and more flexible lending policy allowing you to invest to your heart’s content!

If your business has made a windfall profit or if you have a cash income, then your last two years’ tax returns won’t show what your bank needs to see.

A low doc loan will allow you to borrow an amount that you can realistically afford to invest and repay.

Investing in residential property

Residential property is a favourite investment vehicle for self employed low doc borrowers. As lenders have become more comfortable with low doc lending, their restrictions on types of investments have relaxed.

With some lenders, you are now even able to invest in inner city apartments, serviced apartments, studios, land on islands and even do small duplex developments!

If you also use the property you are buying as security then you can borrow more. In some cases this type of borrowing will make you eligible for low doc professional package discounts.

If you are interest in finding out how you could invest in a residential property with a low documentation loan, call us on 1300 889 743 or enquire online.

Investing in the share market

If you are seeking a more diverse investment portfolio then you may consider investing your loan proceeds into the share market. Low doc investment loans can be used for most types of share investment including options trading, managed funds, shares and property trusts.

The catch is that you have to have residential property to use as security for your loan. For some types of share market investment you can also obtain a low doc margin loan however you will face other risks such as margin calls.

We recommend that you seek independent financial advice if you are borrowing to invest in any asset class that may suffer price fluctuations.

Help! I was declined because of "cash out" restrictions!

The cash out policy that many lenders apply to low doc investment loans is one of the main reasons that loans get declined.

A cash out policy is a lenders limit to the amount of the loan funds that can be given directly to the borrower.

From the lenders point of view, the problem is that the funds may be misused. Of course this can cause a problem if you are investing in shares! Most lenders will now want to have control of the cashed out funds to ensure that you use the cash out for the purpose you stated.

Luckily some lenders do not have a cash out policy, allowing you to turn your bricks and mortar equity into investment gold! Call us on 1300 889 743 or enquire online to find out which lenders can help.

What do low doc investment lenders look for?

Aside from cash out restrictions, most lenders have similar low doc guidelines. Typically you must have been in your current business for two years, although some will consider your loan if you are self employed for as little as one day!

The majority of lenders will not advance more than 80% of the residential security value. Loan discounts and lenders mortgage insurance (LMI) waivers may apply if you borrow less than 60% of the property value.

Contrary to popular belief, most Low Doc Lenders do not ignore your credit file. In fact it is even more important to have clean credit and a perfect repayment history on your current debts than it is with a full doc loan!

There are specialist lenders that can help if you are looking to invest with a low doc loan and have defaults.

What are the low doc investment loan interest rates?

You can find these in our low doc interest rates section. We recommend that you look at the overall return you will make on your investment rather than just the interest rate or LMI.

This is because sometimes the cheapest loan will not let you borrow as much and consequently will limit your investing and also your returns! It may be better to use a mid range loan which will enable you to invest in the assets that you are most interested in.

Three tips to get your low doc investment loan approved

  • Rent income: Although low doc loans allow reduced self-employed income evidence, you cannot self-declare your rental income. Banks will require full income evidence of rent received.
  • Releasing equity: When ‘cashing out’ amounts above $50,000 on a low doc loan, the vast majority of lenders will require detailed evidence of how the funds will be used.
  • Companies and trusts: For our avid investors, you should be aware that borrowing in a company name, unit, discretionary or hybrid trusts with a low doc loan is not accepted by around half of the lenders we use.

How do I apply for a low doc investment loan?

We are specialists in low doc finance and can help you find the right lender.

Call us on 1300 889 743 or enquire online and send us your details. We will be in touch with a few competitive quotes that can help you finance your investment.

  • Claudia

    Since I’m self employed, I can’t prove my income right now. I do have a large deposit though and I want to get a home loan as soon as possible because the owner of the property I’ve been looking to buy has suddenly dropped its price by a fair amount. I still need to borrow 90% on a low doc loan so is that possible?

  • Hey Claudia,

    Yes, it is possible to borrow as much as 90% on a low doc investment loan but it can be quite expensive. You may have to pay over 9% in interest p.a. for this. Please note that you must provide a security that’s a standard house / apartment / townhouse located near a capital city, have a clean credit history and show that you’ve been self-employed for more than a year. Please have a look at our high lend low doc page for more info:

  • Lon

    Can we declare rental income and include it in the assessment?

  • Although low doc loans allow reduced self-employed income evidence, banks won’t accept self-declared rental income. Banks will require full income evidence of rent received.

  • reins

    I would like some help calculating cashflow of the property I am thinking of buying to find out if it will be negative or positive geared.

  • Hi reins,

    You can simply use the investment property cashflow calculator to accurately predict the weekly cashflow position of your next investment property to find out if it will be positively or negatively geared. The instructions on how to use it are on the page itself. Here’s the link to that:

  • Audrey F

    I’m thinking of selling a property I own to later help me buy another IP. Do you have any tips to help increase its value without putting in a lot of money?

  • Hi Audrey.
    It does take time for a property to grow in value so relying on the market to lift the value of your home, could mean you end up waiting for a very long time. However, the good news is that you can ‘force’ the growth on your property by making some minor renovations even when the market isn’t working in your favour. Please check out this page to learn about this in detail:

  • leonard

    How much rental income will the banks be willing to accept?

  • As a general rule, lenders will take 80% of your gross rental income along with other income, such as your salary, to calculate your borrowing power. The reason is mainly because they assume that 20% of the rent you receive will be used to pay for managing agent’s fees, council rates, strata levies, repairs and to cover for any vacancies.

  • Romy

    I’m looking for a low doc investment loan to borrow $1.2 million on a purchase of a $1.9 million property. What sort of interest rates are we looking at?

  • Hi Romy,
    We would need to do a full assessment of income, liabilities, assets etc before we could provide you with an interest rate estimate. Generally speaking, for a low doc investment loan the rates can be anywhere between 4.00% to 8.00% . If your application is strong we may be able to negotiate a better interest rate and a higher lend amount from our panel of 30 lenders.