Are you planning to buy a property? Then one of the easiest ways to achieve this is by applying for a loan. Loans are financial aid offered by banks. To make things easier for individuals who are working as freelancers or self-employed professionals, banks offer low doc property finance. As you can figure out from the name, the low doc property finance doesn’t require too much paperwork. It is far easier to apply, and approval is not that difficult either.
However, this does mean that you don’t need to match the eligibility and qualifying parameters set by the lender. This blog highlights some additional information that will help you in loan application and approval.
Key features of low doc property finance:
A low doc loan is a high-risk loan since the income of the borrower is not sustained by conventional means. Hence, the interest rate of this loan is on a higher side. Also, there is a limitation on the maximum Loan to Valuation Ratio or LVR.
Key documents required for low doc loan:
If you are planning to apply for low doc property finance, then one needs to present the following documents:
- Proof of ABN (Australian Business Name) and GST registration
- One needs to have a Business Activity Statement of minimum 1 year (some lenders may require of 2 years)
- Business Account Transaction Statements
- Personal tax returns
You will have many lenders providing this loan, but when it comes to narrowing down your options to the best one, then seeking the assistance of a professional and an experienced mortgage broker
Who can apply for a low doc loan?
Low doc loans are designed to assist the following:
- Business owners- Company owners, sole traders and people in partnerships cannot provide complete financials because of their complex business structure.
- Professional investors- People who have fluctuating incomes or people who have low income in the last financial year.
- Self-employed professionals and freelancers- They require minimal documentation to qualify for this loan.
Steps to apply for low doc property finance:
If you are applying to apply for the low doc property loan, then the following steps will be helpful for you:
- Start searching for the best lender online- Since there are a number of lenders out there, but when it comes to narrowing down the option to the best one, then the internet is the best way to find a trustworthy name in the business.
- Compare the interest rate- The next step is to compare the interest rate offered by the lender. Often in a hurry to get the loan, we don’t compare the interest rate and settle down with the first option that we encounter. But with a bit of extra effort, you can find a better alternative.
- Check the charges and other fees- During the process of a loan application, there is 1 time processing fee which is charged with the 1st EMI, there is pre closure fees which is charged if you want to pay the loan in full before the tenure is over and many more. you must compare the rates offered by the banks and also enquire about the other charges before making a final call
These are the basic steps to find the best low doc property loan; in case you want to save yourself from all these hassles, you can also contact a mortgage broker, who will help you in making the right decision. They will recommend the best lender for a low doc property loan. Make sure that you thoroughly assess your requirement before making the final call.