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So what does lo doc mean, can you clarify ????? no financials, provide a letter from accountant signing off on income???
Is it like the good old days?
I reckon the top of the good old days was self declared income to 90%.
It didnt last long, and by that reckoning we arent there yet.
I remember getting NO Doc loans. Could borrow 80% without LMI and just declared I could make the repayments without it causing financial distress.
But then you got a little financial stress as Leymans collapsed and interest rates increased substantially?
Hence my original question, Is risk being repriced? Or is this a shortlived example?
I remember getting NO Doc loans.
Pure equity lends without income declaration.
Could borrow 80% without LMI and just declared I could make the repayments without it causing financial distress.
Also be aware that lodoc and nodoc loans can raise an ATO audit target on your back.
The ATO have audited many such borrowers who signed off on declaratiosn that they earned sufficient income to support a loan of say $1m...Then they made loan repayts on that loan. However, their personal tax returns did not support such cdeclared incomes. In a huge number of cases they earned very little. How did someone of a very low income maintain the repayments...???
The ATO view is tax avoidance in the cash economy..The ATO has a long standing series of s264 notices to major lenders who do lo/no doc loans that acquires information on their identities, their certified level of income and much more. Important you know that what you tell the lender is also shared with the ATO.
Thats why lo/no docs loans should be carefully considered. The ATO may ask later where the proceeds come from if your income doesnt stack up. Over 65% of lo/no borrowers were found to have underdeclared income
Its how Wickenby grew too.
Also be aware that lodoc and nodoc loans can raise an ATO audit target on your back.
The ATO have audited many such borrowers who signed off on declaratiosn that they earned sufficient income to support a loan of say $1m...Then they made loan repayts on that loan. However, their personal tax returns did not support such cdeclared incomes. In a huge number of cases they earned very little. How did someone of a very low income maintain the repayments...???
The ATO view is tax avoidance in the cash economy..The ATO has a long standing series of s264 notices to major lenders who do lo/no doc loans that acquires information on their identities, their certified level of income and much more. Important you know that what you tell the lender is also shared with the ATO.
Thats why lo/no docs loans should be carefully considered. The ATO may ask later where the proceeds come from if your income doesnt stack up. Over 65% of lo/no borrowers were found to have underdeclared income