The low doc commercial loans are the most flexible mortgages for self-employed professionals. These types of loans are beneficial for contractors, freelancers and people who don't work on a regular job, as, they cannot provide any tax returns, financial statements, pay slips and income evidence.
The low doc commercial loans offer you to take a loan on what you earn with proper documents. You will not have to give any tax returns or pay slips as income proof. However, it doesn't mean that it is easier to get a loan.
The lender does conduct their set of credit score check and also takes confirmation whether you can pay the loan or not. It will be based on income which you have mentioned in the form. Though it is a low doc home loan, you might have to give the lender some paperwork like bank statements and an accountant's letter.
Difference between the low doc commercial loans and Typical Home Loans
- You can borrow LVR up to 80 per cent with a low doc loan.
- Applicants of a low doc home loan do not have to produce tax returns or financial reports. But in typical home loans, you will have to produce such documents.
- In low doc commercial loans, lenders generally accept the income statement, which confirms that they can repay the debt.
The low doc commercial loans are offered to freelancers, small business owners, or others who hold ABN. These types of loans are designed for the self-employed who cannot apply for the home loan in banks because they do not have any earning proof. The eligibility requirements differ from one lender to the other. In most cases, you will require to have ABN. You should give the documents which are required to be checked and you will have to maintain a history of good credit scores.
Suppose you are self-employed. You might have an idea of your income every year. However, it would help to calculate the cash you can give every month to repay the loan if you are new to the business and don't have any consistent income. Then you can get benefits by taking low doc commercial loans.
As an investors, you might have some regular employment or regular income. If you rely on the investment income, then you can repay the debt quickly. But if you are new in the investment market, you can opt for the low doc loan to get funds for your next investment to become a reality. So, if you are an investor looking for applying for the low doc loan. It would be best to keep in mind that you will receive a rent of the investment properties. It is not included in the BAS turnover, and make sure that income must be assessed enough.
There is a similar situation for the self-employed. The workers might work in a particular month of a year and spread out their income all year. Due to the irregular income and contract worker, you can choose a low doc commercial loans.
These low doc commercial loans are beneficial for self-employed people. You might have to submit some paper work for a low doc home loan like bank statements and an accountant's letter to the lender. In low doc commercial loans, there is no need to give any proof of income or anything else. Only give your bank account statement so that lender gets confirmation of debt repayment. Maintain your credit score properly to get the loan easily.