Finance

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From: Mike .


No doc loans
From: Peter V
Date: 08 Jan 2001
Time: 18:41:12

I recently read in API magazine an article on No Doc Loans. These loans are generally for self employed applicants and require little or no documentation for the loan but I believe there may be some LVR restrictions. Can anyone shed a bit more detail on what these loans are all about?

 

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Lina Cutrona

Reply: 1
From: Mike .


Re: No doc loans
From: Lina Cutrona
Date: 10 Jan 2001
Time: 19:12:36

I am a mortgage broker. And deal with these enquries constantly. A no docs mortgage bascially refers to self employed people wo have no financial documentation. Lenders mortgage insurance is an issue here. Therefore, you will have financial institutions that will fund 70%. 30% will have to be sourced. This can be done with redraw facility on current mortgage and/or surplus funds and/or refinancing current mortgage.

Please email me on [email protected].

Thks, Lina

 

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Michael Croft

Reply: 1.1
From: Mike .


Re: No doc loans
From: Michael Croft
Date: 08 Jan 2001
Time: 19:05:11

Hi Peter, LVR's vary from 70-90% and possibly higher as there are hundreds of lenders out there providing lite doc or no doc loans including solicitors, vendor finance as well as the third tier lenders. Mortgage insurance can be an issue. You usually pay 1.5-2.5% more than you would with a first tier lender as more risk is assumed. They are used far more in commercial real estate than residential, particularly when retailers etc. decide to buy rather than rent and their figures are a bit rubbery. The higher rate is not a problem if you are getting a higher than average return say 10% plus. Get a mortage broker to show the ropes/pros and cons but caveat emptor!

Cheers, Michael