Lo-Doc No-Doc Income Declarations etc?

[Alan H]

While I've never needed to use the above products, I wonder if someone could please explain to me:

1. What types of documentation(particularly income) are normally required to to proceed with such loans?

2. The practical difference between Lo-Doc and No-Doc.......or is it just a marketing differentiation?

3. The typical interest increase you pay for such products over 'standard' loans.


Thanks guys.

 

[Amedeo]

1. Lo-doc loans usually require some evidence that you are generally trading profitably, eg. working account statements.

Note that generally, lo-docs are for Self employed people, or people with an ABN at the very least. You cant be on a salary and declare your income, because you would obviously have payslips, group cetificates etc!

2. Probably the difference between some working account statements, and no statements at all.

3. You will generally pay 1-2% above standard variable loans.

Hope this helps!

 

[Rolf Latham]

Hiya Allan

A true No doc is also known as an asset lend.

Generally 65 % LVR, title deeds and a 100 pts of id and you are away. Youre doing well with rates less than 9 %

A lite/lo doc loan is one where ONLY the income verification is different. Its not uncommon for a lo doc loan app to have 3 times as many pages as a normal one becaue you want to build a nice picture for the assessor.

I call this a wholisitic lend - the prrof income isnt as critical because there is anecdotal evidence that the client can repay.

As stated lo doc product tends to favour self employed people, though a number of funders will lend to PAYG only.

A lo doc with a lowish rate of 6.5 will want lots of stuff to accompnay the appln. Say loan statements for all loans and credit cards, rental proof, and usually a declaration that you can afford the loan.

Some ask for a $ figure, some dont, some ask for a witness to the dec, most dont.

ta

rolf

 

[deeman]

Hi

I'm assuming with Asset Lends that the loan will be based on value of property rather than purchase price?

Any other criteria for an asset lend apart from the 35% deposit?

Thanks

D

 

[Alan H]

Thanks guys......

 

[Rolf Latham]

Hi DM

Yep, Value over contract BUT its not common for valuers to vaue over contract unless they have very very good cause to

THey like you to have a clean CRAA mostly, but even that can be put aside.

Eurofinance will even do asset lends to 80/85 % LVR !

Ta

rolf

 

[deeman]

Excellent Rolf

Thanks once again for your help

D