Low Docs and LVRs

Hey people,

Seems harder to get low doc loan with reasonable rates these days.

My bas statements dont stack up but no probs with accountant declaration

So is there other lenders other than Rams (who I have already maxed with at $750k ) that do not require bas and accept accountants declaration that will go to 80%

Adelaide will do me 60% and 5.6%.

Thanks.
 
Resimac, Perpetual ( Via Mortagge mangers) , Pepper, Latrobe, Liberty ( Also via mortgage managers if doing Accountants letter only), MK funding and Red zed.

^ All does 80% Low doc accountants letter only....which one will come down to which one you service + meet their credit policy VS rates/ risk fee.

P.s Rate sub high 5-6 ( even 7- 8 with some of the above mentioned non conforming lenders)

Cheers
 
Thanks Mike,

So my decision is either stay as is with a lvr of under 60% whilst holding around 2.5m in total with a neutral cashflow or refinance to 80% at a higher rate 6-7% creating a negative cashflow but having access potentially to another 1.6m?

What to do?
 
^ yep that's pretty much it....

I can't make that call for you buddy, as dont know your long term plans and financial position..also end of the day it comes down to Rate VS equity/opportunity- there is an element of risk.

Cheers
 
Thanks Mike,

So my decision is either stay as is with a lvr of under 60% whilst holding around 2.5m in total with a neutral cashflow or refinance to 80% at a higher rate 6-7% creating a negative cashflow but having access potentially to another 1.6m?

What to do?

Calculate it - break it down with numbers so you have a clearer picture of what you need to achieve from individual investments and see if its workable with the higher funding cost.

The interest cost is the cost of funds.

If your return exceeds the cost of interest + other holding costs, and it fits in your risk tolerance, then go for it I say.

Cheers,
Redom
 
What's the reason you need to go down the full doc route? ie, why are BAS/returns not looking sufficient - but accountant is happy to sign off on?
 
Not working as much as I used too

The question you've got to ask yourself is given this statement, do you realistically anticipate your income improve? Lo doc or full doc, if you don't have enough income to make repayments, then it's probably not a good idea to borrow the money.

Personally I'm not keen on lo doc loans with just an accountants letter. At this point an accountant might know that 2014 was a good year, but they might not know that something drastic has changed and the business is about to go under.
 
Not many brokers are keen, even my guy knocks em back, but he still helps me out, I guess cause he's been a main part of our success.
 
Not many brokers are keen, even my guy knocks em back, but he still helps me out, I guess cause he's been a main part of our success.

All I'm saying is I'd want to have a better understanding of someone's financial situation than a simple accountants letter. There is a niche for lo doc lending, but it's a fairly narrow niche.

Realistically I've found that 90% of people requiring lo docs that legitimately qualify, could also probably qualify for a full doc loan if they did a little extra work and preparation.
 
It's the ones who have a fluctuating income year to year but overall they know what they can expect from their business medium term and who have a buffer, sometimes the ones with a large income or capital gain and need to delay the tax return or those with a cash component to their business.

At a < 60% lend I do not have too much of a concern as sometimes it is convenient but once you get to LMI territory > 60% it becomes closer to a full doc loan or you pay for the perceived risk with just an accountants letter.

It is a far different space to pre GFC and NCCP. Not too many lender will discount low doc loans any longer, so I agree with Peter, it is generally better to get your paperwork in order and tax returns done. I am still surprised lenders will accept an accountants letter, most accountants only see a client once a year to do their tax returns retrospectively, what can they offer except a venue for lenders to sue?
 
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