What is a Lo Doc Home Loan?
Lo doc home loans are specifically for use by people who are unable to provide income evidence.
This type of home loan does not require you to provide pay slips, group certificates or tax returns, instead you need to sign an income declaration where you state your yearly income based on the average you are taking in.
Lo doc home loans are designed for self employed applicants and this is where an income declaration comes in, the lending institution uses this declaration to assess whether you can service the proposed debt.
Other standard lending criteria apply such as living expenses and other liabilities but the income used to assess your capacity to borrow comes from the income declaration as mentioned above.
Lending institutions that provide lo doc home loans have different requirements from a paperwork point of view, for example some require an ABN for 2 years whilst others require an ABN for 1 day, another example is that of GST registration whereby some require you to be GST registered and others do no require GST registration.
The requirement for GST registration may also depend on the amount of income declared and varies depending on the lenders own policy guidelines.
To assist you in understanding the mechanics of lo doc home loans and the varying types of products available we have listed below some information for your reference.
Lo Doc Home Loans up to 80%
The majority of lenders offer lo doc home loans up to 80% and this is where you will find the most competitive interest rates, mortgage insurance premiums and lending limits.
The reason that this is the most competitive lo doc home loan space is that lenders who do provide home loans up to this LVR are at a lower risk due to there being a substantial amount of equity in the property.
With such a wide range of 80% lo doc home loans to choose from we invite you to contact us and have one of our consultants provide you with the most appropriate product for your needs.
Lo Doc Home Loans up to 90%
The lo doc home loan market has grown substantially in recent times and as a result some lenders have created new products which go beyond the traditional 80% LVR.
This is where a 90% LVR comes in to assist those who may only have 10% deposit and require a lo doc home loan.
The main difference between this higher LVR home loan and the 80% product is that of an increased interest rate and this is in direct relation to a higher LVR and the fact that the lender is relying on an income declaration to assess your ability to service the proposed debt.
Contact us to and have a chat to a consultant to find out more about the 90% lo doc home loan.
Key benefits of Lo Doc Home Loans
For self employed people a lo doc home loan is an ideal way to purchase a property or refinance as the requirement for proof of income is not required and many self employed people are not able to provide tax returns or income evidence.
To highlight some of the key features and benefits of lo doc home loans we have provided a brief list below:
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Some lo doc home loans provide up to 90% of the purchase price |
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Lo doc home loans can be used for owner occupied or investment purposes |
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Proof of income is not required as lo doc home loans have an income declaration |
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Large range of lo doc home loans to choose from (in excess of 30 lo doc home loan lenders) |
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Competitive interest rates for lo doc home loans |
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Choice of fixed or variable interest rates for lo doc home loans |
There are more to lo doc home loans that what is highlighted above so to find out more just contact us and consultant will help guide you on which of these products may suit your needs.
Lo Doc Home Loans - Standard Variable
A standard variable interest rate is the most common in the lo doc home loan space.
This is because they offer a great deal of flexibility from a repayment and product structuring point of view for features like splits, lines of credit and offset facilities which are not always available for fixed rate loans.
Lo doc home loans with a standard variable rate are subject to interest rate fluctuations based on prevailing market conditions and therefore interest rates can move up or down.
To get more information on standard variable rates for this type of home loan just contact us and a consultant can help guide you through the options available.
Lo Doc Home Loans - Basic Variable
A basic variable interest rate is similar to a standard variable interest rate in a sense that the interest rate can vary based on prevailing market conditions.
The key difference between these two products is that the basic variable home loan is simply a home loan with no bells and whistles.
What this means is the basic variable home loan may not have features such as redraw or offset facilities and may also not provide a line of credit for example.
What this product does provide though is a competitive interest rate generally lower than a standard variable lo doc home loan given the features are limited.
So if you're looking for a no frills product and don't really need the additional features that a standard variable product can provide then this is the home loan you should consider.
To find out more about our range of basic variable lo doc home loans simply contact us and a consultant will assist.
Lo Doc Home Loans - Credit Impaired
Credit Impaired Lo doc home loans are provided for people who have had a credit issue in the past and are unable to provide evidence of income.
There are a number of lenders who offer credit impaired home loans so if you're self employed and have a credit issue you are still able to obtain a product to help you achieve your goals of home ownership.
This type of product is not limited to the purchase of a property but can also be used to refinance an existing home loan, to consolidate debts or purchase an investment property for example.
Generally a lo doc home loan designed for people with credit impairment will attract a higher interest rate, the reason for this is that the lender relies on a self certification of income and that the applicant has a credit issue so these risk factors combined will determine what lo doc home loan interest rate is applied.
To find out more about our range of credit impaired lo doc home loans just contact us and a consultant will guide you through the options we have available.
So which lo doc home loan is the right one for me?
With so many choices of lo doc home loans out there the right loan for you will depend on your unique financial position.
By this we mean what you can comfortably afford and how much of a deposit you have available, other considerations are what location is the likely purchase to be and the purpose of the loan.
So why not contact us and have a chat with a consultant who can help you make a more informed decision.
What do I do next to get my Lo Doc Home Loan?
What you can do once you have an understanding of your needs is to get in touch with one of our consultants either by phone or using the contact us page within this website.
Let us take the hard work out of finding the right product by listening to your needs and presenting you with the options which suit your unique circumstances.
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