If you’re self-employed or don’t have a traditional job with the documents to satisfy the usual requirements of a home loan, a low doc mortgage is most likely your best bet in buying the valuable asset of property.
Designed for self-employed individuals or small business owners, low doc mortgages offer flexibility in documentation that traditional home loans do not. They provide an avenue for individuals who don’t have access to financial statements or tax returns necessary for an ordinary loan.
With the exponentially rising prices in the property market, it’s become more and more pertinent for individuals to gain financial help in order to be able to break into the property market.
If you’re self-employed and have to face the struggles of running a business, it can be tricky to sort out the nuances of low doc mortgages. This article lays out the basics of a low doc mortgage and what is necessary for you to be successful in obtaining one.
Detail requirements for a low doc mortgage
If you’re self-employed, there are still some basic requirements you’ll need to fulfil to prove your financial viability in your process of applying for a loan.
Firstly, you must have been self-employed for at least one year in the same industry. You’ll have to supply business details such as your ABN and Certificate of Incorporation to verify your working status.
Secondly, you need to have your BAS (Business Activity Statements) for the last twelve months on hand, and with their verification by the ATO (Australian Tax Office).
Thirdly, it’s necessary for you to confirm that your income has been registered for GST for a minimum of 12 months.
You could also be required to show six months of statements for your personal transaction or primary business account.
Searching forthe right low doc mortgage
Once you are sure that you satisfy the necessary basic requirements for a low doc mortgage, you should research into the specifics of the loan that you want.
Like all loans, different low doc mortgages have different features regarding interest rates, repayment periods, and repayment amounts.
The unique nature of each individual’s personal circumstances means that loans vary in suitability to your situation. Finding the right low doc mortgage for you can be tricky, especially if you are already running your own business or just swamped with your working life.
An easy way to skip the troublesome research and compare the hundreds of options out there for you is to discuss your situation with a financial planner.
Financial advisors are often highly experienced in the industry and well-acquainted with the numerous options available. This can significantly cut down the time you need to find the loan that fits you.
Applying for your low doc mortgage
Once you decide which loan suits you, you’ll have to negotiate with the lending provider and go through the process of verifying your business and income.
Consulting an advisor to help you through this stage can be cost and time efficient for you and your business. You’ll get a better deal than you would braving the search by yourself because financial brokers are skilled and experienced in negotiating deals with banks and other lending institutions.
It’ll also cut down on the time you need to figure out the paperwork and process by yourself, as brokers will know and understand the application procedure and be able to guide you through it.
By having an expert by your side, applying for your low doc mortgage will be easy and painless.
Figuring your way around financial matters by yourself is tricky but if you get the right help, the process will be much easier!