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Low Doc/Alt Doc Loans

What is a low doc/alt doc loan?

Low Documentation (Low Doc) Loans and Alternative Documentation (Alt Doc) Loans are designed for borrowers who may not meet the strict documentation requirements of traditional loans. These loans are ideal for self-employed individuals, freelancers, or those with irregular income streams who may find it challenging to provide standard proof of income.

Understanding Low Doc Loans

A common misconception is that Low Doc Loans require less evidence of income compared to traditional loans. Instead, they allow for different types of income evidence. These loans are perfect for those who:

  • Have been in business for less than two years
  • Have seasonal or irregular income
  • Earn income from various sources, such as part-time employment, investments, rental properties, or running a business
  • Recently switched industries or moved between full-time employment and self-employment

Eligibility Criteria

To qualify for a Low Doc Loan, self-employed borrowers may need to provide:

  • Proof of ABN and/or GST registration
  • Business Activity Statements (BAS)
  • Business account transaction statements
  • Accountant’s letter
  • Personal tax returns

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    Why Choose Low Doc and Alt Doc Loans?

    Low Doc home loans are often perceived as higher risk by lenders because the borrower’s income cannot be substantiated by conventional means. As a result, they usually have higher interest rates and more limitations, however they can offer a solution to your finance needs in the meantime.

    Pros:

    • Simplified income declaration form
    • Alternatives to tax returns for income verification
    • Options for fully serviceable loans, redraws, lines of credit, variable or fixed rates
    • Available as Principal & Interest or Interest-only loans

    Cons:

    • Typically higher interest rates
    • Fewer features and more limitations on maximum Loan to Valuation Ratio (LVR)
    • Not all lenders offer Low Doc Loans

    CALCULATORS

    Do you want to find out how much you can borrow?

     

    Our borrowing power calculator gives you an initial estimate of what a lender may be willing to lend to you and allow you to see the effect different interest rates and loan periods will have on the amount of money you can borrow, the total interest you pay and your estimated monthly loan payments.

    Looking to explore lending options?

    At Shore Financial, we’re passionate about helping our clients build wealth through property. Tailored customer service, better than you’ll find with any other broker, is our promise to you.

    We’ll also be by your side through your home loan journey, making sure you understand the process every step of the way. Our success is tied to your prosperity – so you can be assured that your best interests are our number one focus. You can also keep informed and up-to-date with current home loan data, economic data and trends by visiting our Shore Learn page.

    Learn more about our team of home loan experts and how they can assist you on your property journey!

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