Low Doc Home Loan FAQ
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Low Doc Home Loan FAQ
 

Q1. Can I get a Low Doc Home Loan if I am not Self Employed?

Most lenders will only approve Low Doc Loans for the Self Employed. There are however some lenders that will approve Low Doc Loans for investors and self funded retirees.

Q2. Are these loans only available through non-bank lenders?

Low Docs Loans are available through the major banks as well as a large number of non-bank lenders. There is a marked difference between the LVRs, as well as lending policies between the various lenders.

Q3. How can I switch from a Low Doc Loan to a Full Doc Loan?

As soon as your tax returns become available most lenders will allow you to convert your home loan from a low doc to a full doc mortgage. Some lenders have a policy that after several years of good payment history your mortgage will automatically be converted to full doc.

Q4. Does the ABN need to be GST registered?

ATO requires that for turnover over a particular threshold, your ABN must be registered for GST. This is important to a lender because if your declare income is above the GST threshold and you do not have a GST registration, your loan may be declined.

Q5. Will I have to pay LMI?

Although there are some variations between lenders, generally speaking you will have to pay the LMI premium if you borrow over 60% of the property value. Some lenders will still insure the loan below 60% LVR but will not charge you the premium, while others will not insure the loan at all due to the low risk of a 60% LVR loan.

Q6. Why do they call it an Asset Lend?

No doc loans are often called Asset Loans because the lender is relying completely on the value of your property to secure the loan issued. They are not taking into account the applicants income nor obligations.