How to Buy a New Property with a Low Doc Loan

Low Doc Loan

If you want to purchase a new house, it’s always good to get the right house instead of the one your bank says you have enough money for based on outdated tax returns. When your income is good and your company is reputable, why not use a Low Doc Loan to buy your house? Currently, you can borrow up to $1,000,000.00 without giving full proof of your income.

Do You Need a Deposit?

Most lenders won’t lend you over 80 percent of the buying price, which requires you to put up the other twenty percent, along with stamp duty. Therefore, you must allow 25 percent of the buying price to cover your deposit as well as other expenses.

There are many lenders who can approve a 90 percent Low Doc Loan. These types of loans are more costly. So we recommend that you offer as big a deposit as you can. You just need seventeen percent of the buying price to cover your deposit and costs with this option.

Do You Need Real Savings?

Most lenders want that you have saved twenty percent of the buying price by either:

  1. Share
  2. Savings
  3. Or equity in another Asset

You comfort the lender with the income by keeping a deposit that you have reported. It also shows that you are good at handling your funds.

Can You Get Pre-Approved?

Of course, Low Doc Loans are suitable for pre-approvals, just depending on the type of lender. Do not get confused. Several lenders call a pre-approval a home finder, Annual Incentive Plan, or conditionally suitable.
In general, a low documentation pre-approval will last 3 months, and whether you don’t purchase an asset in this time, your low doc pre-approval will expire. You can possibly get a pre-approval extension to avoid reapplying for the Low Doc Loan.

Can You Get a Low Doc Loan with a Family Guarantee?

Family guarantees are not available for Low Doc Loans. Whether you don’t have a deposit, you might consider asking your family to borrow in their name and then loan you the money to use as a deposit. We suggest that you get legal advice before you proceed with this structure and always secure the loan with a proper loan agreement as well as a warning. To learn more about low Doc Loans click here.

Can First-Time Buyers Receive a Low Doc Loan?

First-time home buyers can get a Low Doc Loan just like any other home buyer. But it is more difficult to get approved since first-time homebuyers tend to have fewer assets and lower deposits.

Due to this, you typically choose lenders with cheaper Lenders’ Mortgage Insurance premiums and lower asset requirements. Applying for a Low Doc Loan will not affect your aptness for a first-time homeowner’s grant.

Do Banks Accept Any Property as Collateral?

Lenders have more stringent necessities for assets used as collateral for a Low Doc Loan. All lenders accept standard homes or units in the capital city or major regional areas. But if you’re purchasing something unusual, check out

If you are prepared to move on, familiarize yourself with the eligibility criteria for Low Doc Loans. Then, you will understand what it takes to strengthen your chances of approval, and you’ll be able to navigate the application process earlier.

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