Break Free Home and Business Loans are a leading mortgage broker in Melbourne, with over 20 years of industry experience. We provide lending solutions and advice tailored to your needs. We work closely with clients as trusted advisors and are accessible to clients when needed.
Our brokers work hard at understanding our client’s unique circumstances and helping them overcome common home loan challenges. Whether you’re a first time home buyer or an experienced investor, we’ll help you find the best home loan for your situation. Whether you’re self-employed and have trouble proving your income or you’re a contractor or casual worker, we offer solutions for all types of clients’ income sources.
What Is A Low Doc Home Loan?
Low doc home loans are specialised types of loans, where borrowers don’t have to provide traditional documentation proving their income. Low doc home loans in Melbourne are a great solution for many borrowers. This includes self-employed borrowers, or people unable to provide payslips, tax returns, or other financial documents.
Instead, loan applicants simply need to provide basic proof of their income. This can be done with either an accountant’s declaration or a bank statement.
How Much Is Possible To Borrow
Low doc car loans and home loan applicants could borrow as much as 80% of the property value, depending on the lender. This will help to reduce the amount of money that needs to be saved for a deposit. It’s also important to remember that low doc home loans usually require a larger deposit than standard home loans.
How Does A Low Doc Home Loan Work
One of the central benefits of a low doc home loan is that it can be approved quickly. This is because the income assessment process is simplified. Low doc home loans can often be approved within a matter of days. This makes them ideal for borrowers who need to move fast. Another advantage of low doc home loans is that they tend to have lower interest rates than standard home loans.
A low documentation home loan is not entirely without risk. It’s crucial to recognise that because the income assessment process is simplified, there’s an increased risk loans won’t be repaid. This means that borrowers should have a realistic understanding of their ability to make repayments. This must be achieved before taking out a low doc home loan.
Also, low or no doc home loans interest rates are typically higher than a standard home loan. Borrowers must take precautions to make sure they don’t end up paying more than they need to.
Main Types Of The Loan
A low doc home loan with a variable interest rate will have a lower interest rate than a fixed rate. The variable interest rate will move up and down with the market, which can make budgeting difficult. However, if rates drop you’ll save money on your repayments.
Many loan applicants like this option, because it offers more flexibility than a fixed interest rate. You can make extra repayments, redraw from the loan, and even split your loan between variable and fixed rates. As an added bonus, if you sell your property you won’t have to pay break costs.
A home loan with a fixed interest rate is a good option for people looking for a stable repayment amount. The interest rate is set for a period of time, usually between one to five years, and won’t change. This can make budgeting easier, as you’ll know exactly how much your repayments will be.
If interest rates rise during the fixed rate period, you’ll still be paying the lower amount. Many homeowners like this sense of stability, as it can help them plan their finances. However, if interest rates fall you won’t benefit from the lower rates.
Investment low doc home loans are great for people who are looking to grow their property portfolio. The interest rate is usually lower than a standard variable rate, making it easier to service the loan. You may also be able to make interest-only repayments for a certain period of time. This can free up cash flow, which can be used to invest in additional properties.
By getting a low doc investment loan, applicants won’t be able to use the property as security for other loans. This is because the investment loan is for a specific purpose – to purchase an investment property.
Construction Home Loan
The construction low doc home loan is ideal for self-employed applicants who are planning to build their home. As the name suggests, this type of loan is used to finance the construction of a new home. It can also be used to finance the purchase of a vacant lot. The construction low doc home loans for self employed people is paid out in stages, as building progress is made.
This is particularly beneficial. It means that applicants only need to pay for the costs associated with the construction as they occur. There is a key benefit of a construction home loan. It can be used to finance both the purchase of land and the construction of a new home. This can save self-employed applicants a considerable amount of money in interest payments.
Differences Between A Full Doc And Low Doc Loans?
Low doc home loans offer a higher degree of flexibility than full doc home loans. Full doc home loans require the borrower to provide extensive documentation to prove their income and employment history. This can be difficult for self-employed borrowers who may have trouble providing this documentation. Low doc home loans only require a limited amount of documentation, making them much easier to obtain.
However, there are a few things that home loans low doc applicants must keep in mind. Firstly, low doc home loans tend to come with a higher interest rate than full doc home loans. This is because lenders perceive low doc borrowers as being higher risk. Secondly, low doc home loans usually have a lower loan-to-value ratio than full doc home loans. This means that you’ll need to have a larger deposit saved up in order to qualify.
General Requirement For A Low Doc Home Loan
To qualify for a low doc home loan, applicants must prove they have not bad credit history and a steady income. While there are no specific documentation requirements, lenders usually require some form of supporting documentation such as bank statements. If you’re self-employed or have difficulty providing traditional proof of income, don’t despair – there are still options available to you. Let’s go over a few of them now:
List Of Documents
– Overseas tax returns
– BAS/IAS statements
– PAYG summaries from your accountant
– 12 months personal or business bank statements
– A letter from your accountant confirming your income and employment status
– A signed declaration outlining your assets and liabilities.
They may also have to collect additional documentation, depending on specific lender requirements.
There are a few other requirements you’ll need to meet in order to qualify for a low doc home loan:
– You should be employed, either full-time, part–time or self-employed
– You must be able to prove that you have a not bad credit history
– You must be able to show that you have a genuine savings history
– The property you’re looking to purchase must be located in Australia
– You’ll need to provide proof of identity, such as your driver’s license or passport.
By collating proof of the above into a single document, applicants significantly increase the chances of their loan being approved.
Best Low Doc Home Loans In Melbourne Compared
It is easy to compare low doc home loans with the help of Break Free Cheapest Home Loans mortgage broker specialists. We can guide applicants through the loan application process. Our experts can discuss your particular situation with you, and help you find the best lending institution for your needs.
What Interest Will I Pay?
We can help you compare a range of low doc home loan products from different lenders. We’ll help you find the one right for you.
Need a Consultation? Speak To Us!
Break Free Home and Commercial Loans in Melbourne are here to help clients find the best low doc home loans. Call us on 1800 300 777 to book a free consultation. To get the most out of it, have on hand any payslips, tax returns or bank statements you can provide.
In addition, there are a number of adoption loans and grants available in Melbourne. These can help you with the cost of adoption, as well as provide support during the adoption process.
If you’re like most people with a disability, you probably have a lot of questions about disability home loans. How do they work? What are the benefits? And how can you get one? You can also enquire online by completing our Contact Us form. We’ll get back to you as soon as possible to discuss your needs. Our team can help you find the best low-doc home loan for your situation. We look forward to hearing from you.
Frequently Asked Questions
What Is A Low Doc Home Loan?
How To Get A Low Doc Home Loan In Melbourne?
How Much Can I Borrow With Low Doc Home Loans?
The amount of money you can borrow with a low doc home loan depends upon the lender. Some lenders will only offer low doc home loans of up to 80% of the property value. Others may offer loans of up to 90%. Applicants can maximise their chances of getting a larger loan amount by having a larger deposit saved up. Providing clear income statements will also help.