Low documentation in the short, low doc allows the borrowers to apply for a mortgage loan without extensive financial documentation. This is a loan application that applies to borrowers who do not have their finances up to date or have failed to lodge their recent tax returns. Private loans are usually used by self-employed borrowers who might have a hard time offering proof of income.
What Will I Need To Provide For Low Doc Private Loans?
When applying for a low doc private loan, you will not need to give as much paperwork as the regular borrower; you will need to have some sort of paperwork. Like any other loan, you will be required to show the potential lenders some information about yourself and your ability to pay the loan. Here are some of the documents that you might need when applying for a low doc private loan.
Bank statement
One of the easiest ways you can use to determine how your self-employed venture is fairing is by showing the necessary information like the bank statement. The documents will help the lenders to understand your financial situation as they will show the amount of money that is getting into your account and the expense you incur.
Business activity statement
Another document that you will need is the business activity statement. This document is tailored to specific needs and is used to show the tax obligations that your business is subjected to. The document encompasses everything from goods and services tax through to pay as you go withholding and installments. When applying, the past 12 months will be needed.
Letter from the accountant
When you apply for a low doc loan, you will need to have a written letter from your accountant. The document should have detailed information on your business finance condition, and it should also act in support of the other documents that you will be presented to the private lenders.
Borrower income declaration
In case you are not in a position to give proof of the income, you should present the borrower’s declaration. The document will offer some assurance to the lender that you will meet with the required payment throughout the mortgage. If so, the lender will feel more comfortable about giving you the loan.
Can Private Lenders Provide No-Doc Private Loans?
Yes, there are low-doc private lenders. The private low doc lenders are a non-bank option that offers financial aid for people who do not have complete income documentation. However, when choosing private lenders in Australia, you need to find the one that can meet your specific needs. Not all lenders are reliable, as some will have unreasonable conditions that might make you strain.
Before choosing a private low doc company, you need to make sure that you have researched the company you are thinking of using.
The Rates
Before choosing a private loan lender for your low doc loan, you need to research the rates they will give you. You need to choose a home loan company that will offer you low rates. That will ensure that you have an easy time with the project.
Fees
When you apply for a low doc private loan, you will be needed to pay some fees. You need to know the fee you will incur with the underwriting fees, the broker fee, and any other fee you will be required to pay.
Closing Costs
Another thing that will affect the private loan lender you get is the closing costs. You need to ensure that you have looked into the costs of closing your loan. A reliable loan lender should have an estimate, and you should ask them.
Down Payment
Find out the amount of down payment you will need so that you can get the mortgage. Some lenders will require 20% of the down payment, with others will ask for about 5%. Find out the down payment you will be needed to have and if you can afford it.
Reputation
Before you settle for any private lender in Australia, you should take the time to research and find out their reputation. Choose a company that has positive reviews. That will give you peace of mind knowing that you are using a reliable company.
