Self-employed individuals across the world have found themselves pushed against the wall while seeking a home loan. The situation in Australia is no different. But, as the mortgage market in the island nation is slowly turning more competitive, more and more self-employed individuals can finally rejoice with Low Doc Home Loans Melbourne. This credit facility is becoming more common in today’s scenario and making it a possibility for self-employed individuals to enter the property market without the hassle.
So, what is this credit option?
Such credit facility does not demand strict documentation and boasts of instant approval & quick disbursal of the sum. Also known as zero-paperwork loans, a minimal documentation procedure is enough to fetch you a handsome sum to take a dip in the property market. This loan facility has made it possible for individuals without regular income like truck drivers, contractual laborers, etc. to draw a home loan by making 10%-20% of the total sum as a down payment. One can also appoint a guarantor for a low deposit loan facility like this with minimal hassles.
What are the things that would require?
Some of the things to keep in mind while applying for low doc loans in Melbourne include:
- BAS (Business Activity Statements) duly signed by the Australian Taxation office.
- Valid ID proof along with ABN (if applicable) – in case you have a registered business for 2 years or more.
- A duly filed declaration form of income tax returns.
- If you are a builder, you better be a registered one.
Although these are the basic requirements, the terms vary from one lender to the other. So, it is best to ask your lending institution regarding your mortgage loans, or whether you need to appoint a broker or not. You can also seek the assistance of a financial advisor to help you with this task.
Things to keep in mind
While you are applying for a low doc home loan in Melbourne, it is imperative to keep some vital aspects in mind. Some of them are:
- Being at a higher risk than regular financial institutions and a strict borrowing stance from the APRA – borrowers are restricted to 60-80% of LVR (loan to value ratio) depending on whether they can produce BAS or not.
- Bigger deposits also mean higher interest rates. Albeit, if you lower the monthly let-go’s (EMIs), you can significantly lower the interest payout overall. As low doc loans are usually charged with exorbitant interest rates, it is best to assess your repayment capacity where availing one.
You must also try to mend some of the aspects before you avail such a low deposit loan. Those include –
- Build up a deposit of at least 10-20% of the purchase price
- Make sure that you have lodged a BAS
- Lastly, register your business with Goods and Sales Tax (if applicable)
On the rise, low doc home loans in Melbourne and other Australian cities have made mortgages much accessible to the common folks (especially, those who are not salaried professionals).
Considering the varied inflations in the lending market, it is a wise decision to contact a financial expert to clear all your doubts regarding this loan facility. Never hesitate to put forward your queries to the lender’s mortgage experts into making you form an informed decision. Low doc home loans have allowed thousands of Australians to access a home loan. This loan is specifically suitable for people who have assets as well as income, but cannot provide adequate financial statements or tax returns as documented evidence of income. Also, it is important to juggle between potential lenders offering the best lending rates and, then settle on one which provides the best beal. You can also use an EMI calculator to further economize the repayment process!