The growing amount of credit regulation has seen many people herald the death of low doc loans
. Melbourne Mortgage Broker What If We Finance says that despite the tighter regulation and global down turn low doc loans are a vital tool if used correctly.
Borrowers for a number of reasons may not have completed their tax returns but there are other options. Low doc loans can still be used if we can certify income by other means. These can be:
a.Accountants declarations
b.Business Activity Statements (BAS)
c.Trading Statements
d.Interim Management Accounts
Low Doc loans do not mean that income verification disappears its just there are other ways to verify income.
With the growing number of self employed persons in the Australian economy Low Doc loans are gaining popularity. Low Doc Loans are designed to assist borrowers who by virtue of their employment do not have the same level of income verification as PAYG applicants.
Low doc loans are designed to assist those with existing equity and have trouble showing evidence of regular income. Different lenders have different rules about Low Doc loans so contact your Mortgage Broker today.
When applying for a Low Doc loan What If We Finance advise to look out for:
Low doc loans often have extra costs and interest rates. Finance is about risk reward so the more documentation you can produce the lower the rate. In the current environment you cannot expect low doc loans at close to fully verified loan rates What If We Finance advises. Melbourne Mortgage Broker What If We Finance has found that leading valuation management firms have stated that customers stop challenging their valuations. ValEx, VMS and other valuation companies that work with the major banks receive high numbers of dispute requests however few are successful.
Generally low doc loans depending on the Loan to Value Ratio (LVR) may have mortgage insurance apply so there may be higher fees and charges.
To find out if Low Doc Loans are for you contact your Melbourne Mortgage Broker today.
