No-doc recommendations

[RumpledElf]

We are on an extremely dubious and comparatively low income made up of various centerlink payments, odd income from 'hobbies' and foreign income. It adds up to more than enough to pay for this house I saw today. IMHO I have a snowball's chance in hell of getting a regular loan with a regular bank.

I have made an offer for the house subject to finance, but I expect to have to haggle upward a bit. I have enough equity in my PPoR to cover anywhere up to 100% of the value of the second property depending on valuation, so the total lend including my existing mortgage would be well under 80% LVR - probably closer to 50 or 60%, if that makes any difference.

Tips? Happy to be PMed by random mortgage brokers on this forum. We don't have many Real Banks out here to visit and grovel to for money.

 

[Qlds007]

Rumple

If you are after a true Nodoc loan then you will probably be limited to a 70% LVR but the interest rate will not be that competitive.

If you feel that you can state an income sufficient to service the loan then a 60% Lodoc maybe a possibility through a standard lender. Rate would certainly be a lot more competitive.

 

[RumpledElf]

I find my problem with regular banks is that the income level is fine (source isn't) but they deem your expenses for you. I'm rural and low income, so I spend diddly-squat on health, education, rates, no water/sewer, minimal food etc, and they tend to not notice how many decades ahead on the mortgage I am, even after renovating the bloody thing in cash. Oh, and we do just happen to have a 2yo ABN, attached to a business partnership in our names.

Incidentally, I had a random and unrequested visit from the valuer-general's office about 2 weeks ago. He didn't actually come in the house so the valuation would have just been on #bedrooms/construction type/land size, is there any way to find out what the result is or do I just wait for my council rates to quadruple? Every house around here of late has sold for 3-5 times what I paid for mine - ones in the next town sell for 8-15x what I paid - so I'm just assuming it's worth the lower end of that range.

 

[RumpledElf]

Oh, should mention that as it stands, I could stop paying my PPoR (I am ridiculously ahead on it) and redirect the exact same amount of money into an interest-only loan (assuming 9%) for the new place and it would be almost (short by about $20 a week) enough to cover holding costs until the place is divided, cleaned up and rented, after which time the rent would pay for the new house, my PPoR, and some leftover. I'm not exactly planning on sending myself bankrupt here.

Dividing it alone knocks half the mortgage off, as I've offered land value on the house and it would split beautifully into two 15mx45m blocks. This may sound ludicrous, but after spending money to clean the place up and dividing it I'm expecting 20% yeild before costs. Can you see why I want this place?

 

[Kristine..]

Hi RE

What postcode are you talking about?

Not all lenders will do low doc in National (remote) postcodes

Cheers
Kristine

 

[RumpledElf]

I know, I had trouble getting a regular loan with my first house - it was either too remote or too small a loan. It isn't hard to see that the reason this house has been for sale for so long - several contracts subject to finance failed.

New house is in 5491.

ETA: most houses in the town sell for the high 200s. This one is for sale in the 70s. It last sold in the 80s. I offered in the 60s. The valuation may come up high.

 

[Qlds007]

At 60% LVR that post code appears to be ok with a couple of lenders.

 

[RumpledElf]

Hrm, this is starting to get annoying.

No-doc loans DO exist, 60% or 70% IS ok, but here's another snag: some have minimum lend conditions of $150k+. I only want $65k+fees.

Going to be a bit peeved if I miss this house purely because I haven't yet managed to talk to a lender that will do me a loan. I think I'm going to literally take the first lender that says yes, but I haven't found one yet.

Aussie says they have a few on their books that will do it, and St George said they'd do it via the local BankSA branch, had a talk to BankSA but the local guy didn't know what a no-doc loan and I'm waiting for Aussie to call back so still waiting ...

 

[Finance guru]

Hi RE,
Most lenders who are still offering No Doc loans must have them insured by GE mortgage insurers and GE won't do a No Doc loan in that postcode, or even a Lo Doc loan for that matter.
There is the option of non bank lenders who offer uninsured no doc loans, but the rates and costs can be a bit excessive.

The best option from what you've said so far, would I suspect be a CBA loan. CBA have a policy that they will lend to any postcode in Australia with no restrictions. I haven't checked out their lo doc policy for you, but hopefully this will give you a direction investigate.

Cheers

 

[RumpledElf]

Just rang them, CBA don't do no-doc, just lo-doc.

As I said earlier, my problem with full-doc/lo-doc is the banks deem my expenses (as well as about 2/3 of my income not being assessable for full-doc), and then tell me I can lend at most $0k including my current loan (which is more than $0k). I have a spare $1k a month to burn after my current mortgage and the only way I can convince a bank that I don't spend my entire income and a bit more is either to lie and say I make, say, $80k a year, or get a no-doc loan.

Somehow I don't see the vendor wanting to extend the settlement period by 65 months so I can save the $65k to buy in cash.

 

[Gools]

Any way you can make all your income assessable?
Run it through an ABN or something?

 

[RumpledElf]

Possibly, but then I'd still get my expenses deemed at city rates, and there seems to be no way to tell these idiots that I don't pay water/sewer, don't pay school fees, council rates are $300pa, don't pay for this, don't pay for that ...

I live somewhere that people save money by shooting the local wildlife to eat, and the local school keeps giving us vouchers and boxes of food and massively subsidised everything, and everyone except me drives a ute. Mmmmm outback life

 

[RumpledElf]

Cleaning up old threads

Another one all sorted, couldn't get most of the no-docs out there because of the postcode problem, got onto a broker who was extremely helpful and ended up with a CBA lo-doc. As a few on here pointed out, CBA doesn't have a postcode restriction.