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.