Getting a mortgage in Australia for individuals with undocumented income can sometimes be difficult. If you are working as a freelancer, a contractor, handling a small business, a self-investor or self-employed, securing loans and financing follows a different process compared to employed people with regular incomes.
In Australia, there are low doc construction loans available for business owners and entrepreneurs that can provide tax returns and business registrations as qualifications for applying for a mortgage or a financing. However, what can you do if you do not have any income evidence or documentation to provide to your bank or lender as requirements for a mortgage application?
A no doc home loan application is the solution available for your circumstances.
Unlike regular mortgages where you can borrow up to 95% of the property value, an undocumented income will only get you as much as 65% loan to value ratio with a 2-3% higher interest rate compared to banks and other lenders. Short term caveat loans an get you as much as 80% of the property value, but with interest rates starting at 24% per year.
Loan terms are also shorter with undocumented income, compared to mortgages offered to an employed borrower. Regular home loan repayment terms can go as long as 30 years. Loan terms for mortgages without documented income, in Australia, is only up to 3 years interest only. In most cases, the maximum amount per borrower is $1,000,000.
Generally, a bank or even non-conforming lenders will ask you to provide income proofs. These may include tax returns, bank statements, a letter from your accountant, business activity statements BAS, and other financial documents to verify your income. You will not be required to facilitate such in a No Doc Home Loans.
Worried about a credit card debt or any other black marks on your credit file? This will be overlooked by your potential lender in a no doc mortgage loan application.
Most lenders will ask you to sign a declaration. This contains your affirmation that you are indeed capable of repaying a loan with the interest and conditions stated in your loan documentation. They will sometimes ask for a signed statement of assets and liabilities from your end. This credit product requires such since it is not supported by financial documents related to your income source.
The purpose of your loan also matters. It should not be used for securing a commercial property or for any other business purposes. It should not be an investment that will later be used in a business. Such loans are exclusively for personal and residential purposes and should be signed under your name and not a business. These conditions meet the standards of an NCCP unregulated loan. Lenders are breaking the law if they fail to check the source of income of their clients. Thus, requiring you to sign the declarations mentioned above.
This type of mortgage is secured by the property that will be purchased. Even if a lender will not require you any income proof, the property you are purchasing should meet a specific set of standards to qualify.
With a significant change in interest rate due to lack of income proof to support your capacity to repay a loan, you are still qualified for loan packages such as
You can also avail no doc mortgage loans from private lenders. However, it will cost you more compared with a loan from a bank or through a non-conforming lender. Private lenders are much more expensive in Australia. Some charges 2% to 6% more than regular lenders, that’s a lot of savings to consider.
Mortgage brokers will also charge you a fee since this private lenders do not offer commissions to them. That’s another item to top your bill. Weigh your options and compute for extra charges that may come into your way.
No Doc Home Loans are hard to get by. Only a few banks and lenders offer such mortgage applications. Do not worry because our mortgage brokers got you covered here in Intellichoice.
We can find you the right lender that fits your circumstance best. The application process also takes less time and stress with our loan specialists as your guide. Doc loans? we can help you with that as well.
Why wait 12 months to get the income documents that you need. Contact us today to begin your application.
Interested in taking out a Low Document Construction Loan? Get details from this post – Low Doc Construction Home Loans Step by Step Guide for Application
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