Lo Doc no GST

T

treehouse

Hi to all the expert brokers:)

Planning ahead for next deal and need some advice/info please:

Joint application PAYG together with self employed (less than 2 years) so require a lo doc loan for an 80% LVR. (PAYG income not enough as a standalone application).

I believe there are a couple of lenders who allow 12 months BAS statements rather than 2 years and registered for GST with ABN.

We have a company with ABN more than 10 years but not registered for GST as our investment rental income does not require it.

Is it possible to use 12 months business banking statements rather than BAS returns to support this type of application to verify the serviceability requirement?

If so, what other supporting documentation would the lender require?

For instance profit and loss statements for company?

Definitely one for all those brokers who deal in the lo doc lending arena:D

thanks for your time
 
Ausprop said:
just a naive question, if you can provide all the documents for the income, then why lo doc?
Click to expand...

"Joint application PAYG together with self employed (less than 2 years)"

- Im guessing cos ABN is less then 2 years hence why need to go lo doc OR serviceability/income is to low due to irregular income etc...

Regards
Michael
 
Typically, id be looking to drive this through as a full doc as long as the financials for the self employed are available and sufficient.

Interesting what you can get done when you have to.

Lo doc made many brokers take the easy route :)

ta
rolf
 
Treehouse, your loan will not be an issue.

Have a product for;
- 80% LVR
- No LMI, But risk fee is payable
- 12 month Trading statements only to confirm income OR accountants letter ( accountants letter only will attract a higher rate)
-No GST rego is required if income declared is less then 75k
-100% offset
- Loan max $500,000 for this rate

Range of rate on offer...Rate of 5.99% fixed 3 years etc..

http://www.shapehomeloans.com.au/loc-doc-rates

The above low-doc rate link will be updated tomorrow once we get all the confirm June RBA rate cut.

The 5.99% fixed for 3 years is currently still available for loans up to 80% LVR but i been told this is for a limited time only, promo end date to be advised.


Regards
Michael


treehouse said:
Hi to all the expert brokers:)

Planning ahead for next deal and need some advice/info please:

Joint application PAYG together with self employed (less than 2 years) so require a lo doc loan for an 80% LVR. (PAYG income not enough as a standalone application).

I believe there are a couple of lenders who allow 12 months BAS statements rather than 2 years and registered for GST with ABN.

We have a company with ABN more than 10 years but not registered for GST as our investment rental income does not require it.

Is it possible to use 12 months business banking statements rather than BAS returns to support this type of application to verify the serviceability requirement?

If so, what other supporting documentation would the lender require?

For instance profit and loss statements for company?

Definitely one for all those brokers who deal in the lo doc lending arena:D

thanks for your time
Click to expand...
 
As long as you can show the income it will be OK to show bank statements. The thing is if you don't register for GST lender will not be able to take your income above $75,000 as that is the threshold for GST registration.
 
Thank you all.

Michael, on that product is the risk fee a lot higher than the LMI?

How much higher is the rate if only able to supply letter from accountant?

If its a joint application to support the serviceability of the loan at what point down the track can you apply for a full doc loan if hubby is self employed and I am PAYG? What are the lender requirements?

thanks in advance:)
 
Risk fee is a bit higher than LMI. Rate for an accountant's letter lo-doc is at least 2-3% higher than normal HL rates, depending on LVR and lender.

You can apply for full-doc later when your husband has adequate financials to qualify. Same requirements as any other self-employed person.
 
Risk fee is generally higher....the cost of doing business outside the box unfortunately- how much higher, will depend on lender, LVR, loan amount etc...but it be around 0.50-1% higher.

Acct letter only at 80%??? roughly 1.10-1.50% higher for the variable ...fixed don;t know need to ring and find out if there's any special currently on + negotiate.

Need 2 years consistent tax returns and 12 month GST to switch to full doc.
 
Whilst a lo doc loan is likely acheiveable, I'd be looking very hard to find a way to do it on full doc first. There are even a couple of lenders who only require the most recent tax return, not 2 years.

After a couple of potentially nasty experiences (where a certain amount of fraud may have occured), I won't write a lo doc loan purely on an accountants letter. These deals go one of two ways. Either the accountant is upfront and it doesn't service, or the accountant tries to help a mate, inflates the income, and it only services on paper and the borrower has problems later.

My advice is simple. Sit down with a broker and figure out where you're at and where you'd like to get too. This may mean a lo doc loan, but at least you can work towards getting the right documentation together.

Another interesting observation I've made over time, is that if you still need a lo doc loan after about 4-5 years of trading, your business probably isn't as healthy as you think it is.

A lot of people in small businesses don't have a clear line between their business financials and their personal financials. Most small businesses only start to really perform when the owner treats themselves like an employee, with a regular PAYG salary, and income tax paid on that salary. They also live off that salary (without dipping into the business). If there's cash still in the business at the end of the year, you can always pay yourself a nice bonus.
 
^^ agree, you may think your loan is "loc doc". because maybe on "PAPER" your not making a lot...but if you present your file too any experienced broker they would be able to tell you what they can add back and what income the banks is willing to take in rather then what's on paper.

If you can stay and apply for a Full doc, and if a bank tells you your file is not acceptable for full doc- don;t take that as the final answers as every bank as a slightly different full doc requirements ;

- some are happy to accept 1 years tax return only, as long as you had the ABN for 2 years +
- Some will be happy with 6 month ABN only if it's a contract based job ie contractor with ABN.

Your best to speak to a broker rather then speaking to multiple banks...
 
So if I understand correctly, we would need to wait at least 12 months before being able to obtain some finance for purchase....at loaded rates

or

2 years with tax returns.....that's a long wait:(
 
Treehouse - you can always get finance if you really need it. It all depends on how much you are prepared to pay. Without proof of income you are a riskier borrower so you will be charged accordingly. That is how credit works.
 
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