ANZ has now joined with the other banks to implement changes to its ANZ low doc loans. This is in line with the responsible lending guidelines under the NCCP. Westpac has been for a long time requiring BAS statements on its low doc loans. CBA has just recently changed its lending criteria and low doc loans policy and now require BAS on all low doc loans irrespective of LVR. Suncorp also require BAS on all Suncorp low doc loans.
So in conclusion, the lending criteria for major banks is now changing rapidly, and BAS is now part of the landscape.
We are now seeing low doc loans harder to obtain.
There has been a real tightening of credit policy by the banks. The days of the low doc declaration only have disappeared. Banks are now starting to take a “limited income evidence” approach. CBA have just changed their low doc loans policy to require BAS statements on all low doc loans.
Further, we have just seen RAMS Home Loans founder John Kinghorn warn that home loans to self employed may dry up.
What does this mean for those looking for low doc loans?
Lenders are looking for further verification as to the income declared. This can take the form of bank trading statements, BAS statements or an accountants letter.
Currently the more difficult low doc loans are 80% low doc refinances and construction.
Low Doc Construction Loans
Low Doc Loans 70% refinance with no mortgage insurance.
• NO LMI applicable between 60% & 70%
• Max loan amount $1.5m on single security and $2m for multiple securities
• Available for purchases and refinance (no cash out or consolidation of unsecured debt)
• Refinance business debt up to 20% of loan amount
• Company and trust borrowers acceptable
• Construction available
• Bridging Finance
• 100% Offset
• Lo Doc to full doc conversions available anytime
• BAS and Bank Statements
• Lo Doc declaration & Accountant verification
Low Doc Commercial loans are still available up to a maximum LVR of 80% on good commercial properties in major metropolitan areas. The maximum loan size at 80% is $1 million. Larger loans are available at lower LVRs.
Applicants, which can also include companies, must have clean credit and current loan must have been paid on time. This is to be shown through six months loans statements. Specialised securities are not acceptable at 80%. Can be for both owner occupiers and investors. Must have 2 years ABN.
Max interest only period is normally five years.
True term loan.
Interest rates for Low Doc Commercial Loans
Low Doc Loans can be used to refinance existing home loans at 80%, however they are harder to get approved due to the tightening of credit criteria by the banks.
As a guide the loan being refinanced should be a full document loan and if there are any extra funds being requested then the purpose of these extra funds must be clearly stated.
Full Doc Loan to Low Doc Loan at 80%
For 80% refinance low doc loans
- Income Declaration Form
- No business trading statements
- Six months current loan statements (including credit card statements) showing excellent repayment history (absolutely no over limit or missed payments)
- Clean credit
- Two years ABN
- Registered for GST
- The applicant must be clearly able to demonstrate capacity to repay the loan.
Low Doc Loan to Low Doc Loan at 80%
If the loan being refinanced is a low doc loan and you want to refinance to 80%, the purpose of the extra funds must be clearly explained. The applicant must be clearly able to demonstrate capacity to repay the loan.
- Income Declaration Form
- Three months business trading statements
- One months personal statements
- Six months current home loan statements showing excellent repayment history (absolutely no over limit or missed payments)
- Clean credit
- Two years ABN
- Registered for GST
- 60 to 70% NO LMI charged to customer
Large low doc loans are still available. Many lenders are now capping out their maximum low doc loan amount at $1 million. There is still funding for large million dollar low doc loans above this figure. As a guide you are looking at 1% set up costs and a normal investment home loan rate. Maximum 60% LVR and sound residential security. Cash out available in certain circumstances. Ideal for purchasing or refinancing prestige property.
Updated March 2012
Large Low Doc loans are still available up to $1.5m in major metro areas. If you are looking for a jumbo low doc loan over $2m then these may be available however they are discretionary. The applicant needs to have clean credit, have a strong asset and income position. BAS are not required and neither is an accountants letter. What is required is evidence of strong bank trading statements for the last 12 months.
The maximum LVR is up to 60% of the property value, with a lower LVR being preferred.
Please call us on 1300 LOW DOC 1300 569 362
Effective Close of business 30 April 2010 Bankwest Low Doc Home Loans will be withdrawn from sale.
What does this mean?
Refinances will no longer be available, using a Bankwest Low Doc Loan.
For purchases there will be the re launch of the Easy Doc Product. This means there will only be one rate irrespective of the LVR. The Easy Doc Home Loan will automatically roll to the Lite Home Loan after the 3rd year anniversary date.
Updated March 2012
Bankwest Low Doc Loans have the following features:-
BankWest Low Doc Home Loan
No monthly account fee
A straight-in variable rate home loan product for self-employed borrowers.
Self declaration form with an accountants sign off
New Purchases max lend = 80% LVR – $1m
Max lend $2.5m per loan without LMI
Refi available only on land to 60% where obtaining construction funds
100% offset account available
No trading statements required
Can roll to any product if satisfactory conduct throughout previous two years
LVR = 60%
LVR = 80%
Refinancing Low Doc Loans
Bankwest will still not do refinances with their Low Doc Loan product, however we do have other lenders that will refinance Low Doc Loans up to 80% of the value.
Bankwest will do purchasing through their Low Doc Loans and have two tiers. One low doc loan is done up to 60%. The other low doc loan is done up to 80% and is at a slightly higher rate and will need to be mortgage insured. Both Bankwest Low Doc Loans require an accountants letter, however, if you need an alternative without an accountant’s letter this is possible. With the alternative the main criteria is there must be substanial deposits into the business entity’s bank trading account for the last 12 months.
Want to know more please call us on 1300 LOW DOC, 1300 569 362
Low Doc loans are historically divided into two categories. Low Doc Loans without mortgage insurance and low doc loans that are mortgage insured.
Generally low doc loans 60% or less do not require mortgage insurance. For this reason they are easier to qualify for. However, they do require 40% equity.
Up to 80%
These low doc loans are normally mortgage insured, however, it is possible to get 80% low doc loans without BAS, without mortgage insurance. For the mortgage insurance low doc loans, one of the first things looked at is the postcode. In many cases, the postcode of the security property will determine what level the mortgage insurer will go to. To search these mortgage insurance postcodes, click on this location wizard, and enter your postcode.
The figure under LMI Self Certified is the maximum loan size the mortgage insurer will consider in that postcode.
If your postcode returns “On Application”, then this generally indicates that in the eyes of the mortgage insurer the security area may not be as strong.
CBA Low Doc Loans and ANZ Low Doc Loans have both moved quickly to increase their rates by 0.25%
St George Low Doc Loans and Westpac Low Doc Loans have held off moving more than the RBA rate increase as well.
Both the CBA and ANZ will also increase their deposit rates by 0.25% as well
Are rates heading back to normal?
What’s normal home loan rates?
As a footnote to the above, ANZ Low Doc Loans are no longer being done at 80%. CBA and many of the major banks are now requiring BAS statements with their 80% low doc loans. Given this need for BAS is this really a low doc loan? There are still alternative low doc lenders out there at 80% for both purchases and refinances that do not need BAS.
Rural low doc loans now available for loans that have an investment purpose. Generally for a year only, so there needs to be a clear exit strategy so the loan can be paid back. These types of loans are normally low LVR, and it is preferable there is a building on it, although not mandatory.
85% LVR Low Doc Loan for clean credit still achievable in major metropolitan areas.
Also Low Doc Loans for vacant land are still attainable as long as land has an investment purpose. A low doc loan for vacant land is similar to a Serviced Apartment Low Doc Loan and is considered on a case by case basis.
Looking for a low doc loan for your motorcycle purchase, or a marine low doc loan? then call us 1300 LOW DOC
Low Doc Loans 80% No BAS now available for refinance and purchase. No Business Activity Statements required. Clean credit only.
Available in major metropolitan areas. Must be zoned residential and have a building in sound condition on the property.
Rates are different dependent on upon whether it is a refinance of an existing low doc loan, or a purchase. Rates as per the home page.
If you are in Sydney, the rate may be cheaper for the LOW DOC 80 with NO BAS NO ABN refinances.
Low Doc Construction 80% LVR with No BAS returns also considered in major metropolitan areas. Tender must be from a major licensed builder.