Trust + LoDoc financing

With the Banks adding all these new requirements to lo-docs making them a poor mans full doc? I can't meet there requirements any more. Never fear I have another idea?

I'm looking other ways to source funding. I have something in my head that I'd like other people to view and say yay or nay to it working?

I personally loan my D-Trust the 20%+ closing costs, the property the trust buys with an 80%LVR loan. The property will be cashflow + using 75% of its rental income based on a 80% loan.

I'm told if I meet the requirements above then the trust will be approved to fund the purchase?

Is there an easier way?
 
So even as a Trust entity you need to have BAS?

I didn't think you needed that as long as the trust can show cashflow to cover the loan? ie the rental from the purchased property?

Thanks for your advice ooppps I mean input Richard :)
 
I think what Andrew is rying to get at is that this would be a Full-Doc loan with the trust demonstrating serving via rental income.
The issue is that they would want financials from the guarantors associated with the deal. I assume this would then lead you back into Lo-Docville.
am I on the right track?
 
Spot on BD, I wont make the cut for a Full doc and the real lo-doc is gone now. I'm looking at utilising the trust to purchase.

The trust is GST registered atleast 2 years and will have the 20% deposit + closing costs in its accounts.

I was of the thought that as long as the income from the soon to be bought property was more than the loan based on 75% of the rental income, Then that would be enough to get it across the line as far as using the trust?

I guess by both your comments this is wrong and i currently have no way of funding any property purchase ever. The trust currently has no income other than properties to be purchased by it and i have a wife and 3 kids so my serviceablilty is up the creek for fulldoc.

How do I move forward?
 
The new Westpac, St George & RAMS policies specifically states that BAS statements are required, regardless of the circumstances of the income, so BAS statements would be required even for individuals only claiming to earn less than $75k.
 
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So If I showed the BAS that had zero income would I get laughed at? I have no issue showing the BAS as I'm not telling fibs as mum would say.

1) At what stage would the bank allow the actual income of the property I'm trying to purchase to be taken into account.
2) How does the trust earn money if they won't let it buy anything till it has cashflow?


I'm confused :D
 
Hi Andrew

The bank will basically look through the trust. They will want to assess all income from the trust as well as the person or people behind the trust. All income and expenses such as trust loans and personal loan and even other guaranteed loans will be taken into account.
 
Much a case of follow the money isnt it.

Govt dispurses money through stimulus packages, needs to have it paid back at some point in time as thats what people in the US look at - the level of debt they now have and how f'd they are...

If the Govt - oh I mean banks - Hmmm... crack down on the low doc lending, get more people back to work so they can buy more properties for their 'future', greater tax revenue - payroll, land, income... a 'cleaner' loan book for the bank.

Money flows back to the govt...
 
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