If you are self-employed or a small business owner and don’t have the required documents for a standard home loan application, then you may have heard about low doc and alt doc home loans.
Alt Doc home loans still require supporting documentation and go through full credit assessment criteria, however the documentation the bank asks for, caters to a wider variety of financial circumstances, and complies with today’s lending standards.
Alt Doc loans are a solution for Australia’s army of self-employed workers who may not tick the usual loan application boxes or might not have the extensive ABN history and paperwork required by some mainstream lenders.
Low Doc and Alt Doc loans are a great alternative for our customers who are looking to borrow funds, but can’t prove their income as you would with a standard bank. Instead of providing 2 years tax eturns or financials, Alt Doc allows clients to provide alternative items to prove income such as:
The downside to using the Alt Doc option is usually that you pay for it with a higher rate and often they can include a risk fee which can be quite significant.
Having said that we often come across certain banks that want to promote their Low Doc range and will have specials on their Low Doc products.
For example, we can currently get a Low Doc loan at one of our lenders which is 2.99% and no risk fee, for an owner-occupied property. The only income document provided for this need to be a letter from your accountant declaring your income. This is perfect for our customers who have not completed their financials for the current years.
These loans are a great alternative to regular lending, however knowing exactly what structure fits your situation for these loans is crucial. That’s why it is important to come and talk to us about your situation, and we will look through your options. If you have any interest in using this strategy, it must be fully supported by your accountant to proceed.
Please contact us if you think this alternative lending is something that may suit you.