Detailing Guidelines on Low Doc Property Finance

Normally, to avail property loans, you need to produce a large number of documents, including last three years tax returns, credit reports, financial statements, bank statements, inventory records, residential proof and many others. But those who have recently started their business cannot submit such documents to avail property loans. In this regard, you can go for a low doc property loan option. You do not need to provide last three years financial records and tax returns for such loans. Low doc loans are designed for customers who have good income and ability to repay the amount on time, but have no record of the past several years. Still the lenders need to check a few details of your business before disbursing the loan, and they have somewhat different document requirements. You still need to provide the following documents to avail low doc property finance: 

Low Doc Property Finance

• You last 12 months business activity statement or inventory records
• Last three years bank statements
• Interim financial statements along with last two years tax returns
• Income statement verified by your accountant
• Business details such as ABN number and GST registration details

Low doc property finance can charge you a higher rate of interest, because lenders will take more risk by providing such loans without verification of any documents. But you will get plenty of options with private lenders. You can compare the rate of interest offered by different lenders and choose the best finance option. For your business expansion, you need to buy some property, and for that, you can go for a low doc property loan. Low doc loans allow you to buy residential properties as well, and you can avail such home loans without providing any extensive documents.

Why would you go for low doc property finance?

There are several reasons for which you may consider applying for a low doc property loan:

• If you do not receive a fixed salary and if you have income fluctuation, then you cannot prove a steady monthly income to your bank. In that case, they would not provide you any home loan on your fluctuating income statements. For example, if you have received lower income than last year, then banks will not provide you any loan, because they will treat your present income as income-in-loss. Similarly, self employed professionals are often not able to produce steady income every year. If you have recently started your business within the last two years, then it is natural that you do not have last three years’ income tax returns. In this case, you can apply for low doc property loans because lenders will check your present monthly income only to disburse the loan.
• For traditional loans, you need to show good credit history. If you have bad credit score, then banks will not grant you any loan. But in the case of low doc property finance, you can easily avail the loan even with bad credit score. Apart from that, if you have good credit history over the last few months or years, then you do not even need to pay any additional Lenders Mortgage Insurance or LMI.
• You will get more flexibility in low doc property finance. You get the freedom to make additional payments any time as per your convenience. For instance, if you have some surplus amount in your hand, you may add it in your loan account and subsequently reduce your loan amount.
• Lenders can offer you redraw facility on your low doc loan account. If you have any financial crunches, then such an option may come as a boon to you. Lenders may also allow you to redraw more amounts after repaying certain amount of your existing loan.

Low Doc Property Finance

But all lenders are not same and they cannot provide you any or all of these facilities. So it is better to search low doc property finance from different lenders and check the features of different types of loans. Finally, you can choose the best secured or unsecured finance option according to your needs.