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For self-starters, independent professionals, and those with diverse income streams, securing traditional finance can sometimes feel like a hurdle. Low Documentation (Low Doc) and Alternative Documentation (Alt Doc) loans offer a pathway to property ownership designed specifically for individuals whose income verification might look a little different.

 

Understanding Your Options with Low Doc Loans

It's a common misconception that Low Doc loans mean less scrutiny. Instead, they provide flexible ways to demonstrate your ability to manage loan repayments, acknowledging that traditional documentation isn't always the best fit. These loan solutions can be particularly beneficial if you:

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• Have been operating your business for a shorter period.

• Experience fluctuations in your earnings throughout the year.

• Derive income from a mix of sources, including freelancing, investments, or side ventures.

• Have recently transitioned in your career or between employment types.

 

What Information Might You Need?

To assess your eligibility for a Low Doc Loan, you may typically be asked to provide documents such as:

• Your Australian Business Number (ABN) and/or Goods and Services Tax (GST) registration details.

• Business Activity Statements (BAS) to illustrate your business performance.

• Statements from your business bank accounts.

• A letter from your accountant confirming your financial standing.

• Your personal tax returns.

 

The Landscape of Low Doc and Alt Doc Lending

Lenders often view Low Doc loans as carrying a slightly elevated risk due to the non-standard income verification methods. Consequently, these loans may sometimes feature slightly higher interest rates and potentially have different lending parameters. However, they can be an invaluable tool in achieving your property aspirations right now.

 

The Advantages You Might Find:

• A simplified process for declaring your income.

• Acceptance of alternative documents in place of traditional tax returns for income proof.

• Access to fully featured loan products, including redraw facilities and various rate options.

• Availability in both Principal & Interest and Interest-only repayment structures.

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Things to Keep in Mind:

• Interest rates may be comparatively higher.

• The range of features and the maximum Loan to Value Ratio (LVR) might be more restricted.

• Not all financial institutions offer Low Doc Loan products.

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As business owners themselves, Claremont Financial brokers are well equipped to guide you through the lo doc process, speak to us today to get started.