Facts you need to know about low doc property lending

Everyone dreams of becoming their boss. While some are happy being in a routine, and some prefer to leave their monotonous job to start a new business. All stays well and good when people become entrepreneurs until the time they decide to apply for a loan. Freelancers and self-employed individuals have no fixed salary and they cannot produce proper documents to apply for a loan. This calls for low doc property lending where individuals without a fixed income can convince the lenders of their reliability and get their loan sanctioned.

Property Lending

What is low doc Property Lending?

When a person is applying for a loan, they need to be able to produce some documents like,

• Stable income proof
• Liabilities (the lesser the better),
• Assets (the more the merrier)
• Business proof
• Bank statements
• Inventory records

Freelancers, contract-workers and entrepreneurs who are just starting fail to tick all these boxes. While freelancers and contract workers often end up making more than traditional job worker, the problem arises with the documentations. To address this issue, mortgage brokers came up with this low doc property lending option. In this case, people who do not have proper business or income proof can apply for the low doc property loan via mortgage brokers. This is a secured loan where you need to mortgage your assets.

Documents needed for low doc Property Lending:

Firstly, there is a difference between low doc property lending and no document lending. The former is more about the applicant being able to provide for any mode of income as they do not have the traditional payslip. Here, the documents the borrower needs to provide are:

• Declaration of Income with self-attestation. This declaration will be the usual income statement.
• Registered business name
• Business name used in Australia
• Bank statements of the past 12 months
• 12 months’ statement of business activity (BAS)
• A letter from the accountant of the borrower
• Confirmation of 12 months’ GST statement might be required

With these documents, the borrower also needs to have a clean credit record and no second mortgage on a property. The borrower is also required to provide the complete papers of the property they wish to purchase.

Benefits of low doc Property Lending

Here you can find some benefits of low doc property lending:

• One of the hassles that loan applicants often face is submitting proofs like tax returns and payslip copies. But, with low doc property lending, a few documents are enough to make you eligible for getting the home loan.
• The self-employed or contract workers have the option to buy a property with this low doc property lending and they do not need to submit various documents.
• No shortage of lenders will provide the freelancers with this kind of loan. Many banks offer entrepreneurs the low doc property lending and they are required to follow the traditional mortgage rules once the documents are finalized. 
• The low doc property lending is not limited to just home loans. While it did start to enable freelancers have their own property, this lending option is extended to other necessities like vehicles.

Property Lending

Why should a person compromise with their dreams when options to merge both are available? Previously, people knew that to have a house, car, and holiday packages and other necessities, they need to slog off at an office desk for 8 to 9 hours. Freelancing and technology made it possible for people to work even from home and now they can also own a property with the low doc property lending.