Self-Employed? No Payslip? No Problem. Try Low Doc Loans

Most banks and home lenders in Australia favor borrowers with complete requirements. Important documents such as payslip or certificate of employment are needed to confirm that you have stable recurring income that you can use for repayments. But not everyone is an employee. Some are self-employed professionals or entrepreneurs. If you belong to this group and you need to apply for a mortgage, you may explore the possibility of applying for low doc loans.

What is a Low Doc Loan?

Low doc home loans (also known as alt doc loans or lite doc loans) are often used by self-employed Australians or other borrowers who are not able to submit the usual documents to verify income sources.

NOTE: Don’t confuse this loan with No Doc Loans, which are no longer offered in Australia.

Lenders who offer low doc loans use a form of self-verification process where you can state your income using a declaration document.

Your lender will use its credit scoring for self-employed borrowers to assess your capacity to pay for the loan with the income you have declared.

Additional documents may be requested such as bank statements or accountant’s certification to support the declaration.

Why Apply for a Low Doc Home Loan?

The main reason why people are applying for a low doc mortgage is they don’t have the traditional documents needed such as payslips to verify their recurring income. A low doc home loan may be ideal if:

  • You are running a business with a complicated structure
  • You are an investor and you are receiving regular income from your investments
  • You are a contract worker and you spread your income out over the year

You might find it overwhelming to get approval for a low doc loan in Australia.

So it is ideal if you work with a mortgage broker who has a deep understanding of non-conventional credit policy and process for self-employed borrowers.

What are the requirements for a low doc home loan?

Low doc borrowers are often categorized as high risk borrowers, so lenders usually follow stricter rules before they grant a loan. Australian banks may require you to submit your latest tax returns and will assess your business or your income sources. Some lenders still approve low doc loans even without tax returns. Instead, they may request you to provide the following requirements:

  • Registered business name and ABN
  • Business Activity Statements (BAS)
  • Self-verified income declaration
  • Accountant’s statement
  • Previous bank statements

These documents will be used by the bank to assess if you are capable of servicing the low doc loan.

For inquiries, you may call Shop Your Own Mortgage on 1 300 256 081 or send an email to hello@syomortgage.com.au