Low Doc Home loans in Australia

The mortgage crisis of the past few years has caused banks to tighten restrictions on lending practices. The self employed Australian have found it more difficult to obtain a home loan than in previous years.

A typical mortgage application may involve:

income documentation
asset documentation
employment documentation
tax records
bank statements
statements of explanation
Many borrowers document:
the previous two years employment
the previous two years income

For many borrowers this may not be an option. They may not want to share their private financial information, or they don’t want to explain gaps in employment or income.

Low Documentation Home Loan Options

Many lenders may offer borrower the option to get a mortgage with much less documentation.

This can be done many different ways.

Some lenders will allow a borrower to prove their assets but not their income.

Other lenders will allow a borrower to provide almost no documentation.

This is often known as a “low doc” loan.

Interest rates on these types of loans are usually higher than on other mortgages.

Often times a lender will not lend as much on a property as they would if a borrower disclosed more information.

For example, a lender may offer:

95% financing to a borrower who provides full documentation
85% financing to a borrower who provides very little documentation

Low Doc Home Loans are also available to the credit impaired.

Lenders that offer these types of loans are usually specialized mortgage lenders.