Low Doc, Lo Doc, No Doc No Financials, Easy Income Verification, even to 75%!

Low / Lo or No Doc to 75% for Self Employed, Contractors, Commission Only, Business Operators & those with Hard to Prove Income

Many blame the Global Financial Crisis on American Non Bank Low Doc / No or Lo Doc Lenders, who provided non conforming mortgages to those who could never afford them, with no deposit lending in excess of 100% of the home valuation. Mortgage interest rates were often heavily discounted at the outset, borrowers may also have been unemployed, and when interest rates were adjusted to market mortgage rates, borrowers in USA fell into arrears and left their homes in droves.

Hopefully this will never reoccur and for some time the no financials loan, also know as the low doc, lo doc, No Doc or non conforming loan, which was primarily used to assist self employed individuals and small business operators, was withdrawn from the market.

Now though, this low doc product has been re launched to the market by mostly non bank lenders, including solicitor nominee funds, private lenders and finance companies. Low Doc, as high as 75% of the property valuation, provides opportunties for those  who are looking at a start up business or they may have been running profitably for say 12 - 18 months and their Bank has said No, as a Bank can insist on at least 2 years financial accounts prepared by an Accountant. The Bank can then average the 2 years, which makes it hard as it is not uncommon for a business to run at a loss in year 1.

Another classic example of the the low doc loan helping clients is when you have good equity in your home or commercial property, but often as a result of the recession, cash flow is down and you want to refinance up to 75%  to consolidate debts or inject further capital into your businness. This may also create the opportunity to extend the term of the mortgage or loan to significantyly reduce monthly payments. Changing from a Principal and Interest payment loan to Interest Only can also assist free up some monthly cash. We often have new clients referred to us, who have an excellent history with their Bank, but the Bank does not want to lend any  more and in some instances has decided that they will reduce your facilities.

The good news is that we now have a variety of non bank, nominee and second mortgage lenders that provide Low Doc or Lo Doc, Easy Income Verification solutions which can help you with those non conforming loans, that make sense to you, but not to your Bank!.
 

Some examples would be:

• 30 year Home Loan to 75% of the valuation, for a small business operator to buy a home, whose financial accounts were not up to date.
• 6 month Bridging Facility to 65% of the valuation, including capitalised interest, to allow a vacant residential investment property to be sold.
• 3 year Home Loan to 75% of the valuation, with options to extend the term, for first home buyers whose employment and gifted deposit did not meet any of the Banks lending criteria.
• 4 month Debt Consolidation and Home Loan Refinance to help an unemployed couple prevent a mortgagee sale, allowing them time to sell  through a Real Estate Agent at a fair price
• Purchasing a block of land to build a dream home but unable to finance through a bank as own home had not sold, requiring bridging finance with an additional amount to cover interest paymenst for 12 months. 
 

NOTE: In all these examples the lender must be fully informed of a borrowers situation, so that they can then make their lending assessment based on their usual credit terms and conditions. This may include checking income and expense details against bank statements and requesting an updated Registered Valuation, through an approved valuer. These facilities will attract a higher interest rate, so it is essential that a sound plan exists to repay through sale of an asset, or to refinance to a more competetive rate once income details can be verified or returned to pre recession levels.

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