The low-down on 'Low Doc' home loans
Estimated read time: 2 Minutes
If you’re self-employed or a small business owner and don’t have the required documents for a standard home loan application, then you may have heard about low doc and alt doc home loans.
What is a low doc home loan?
A low documentation (or Low-Doc) home loan can mean something different depending on the lender you're dealing with. Commonly however, it refers to a mortgage loan that requires less information than 'standard' home loans to demonstrate ability to repay the loan.
However, due to the level of documentation requested, low doc home loans didn’t allow lenders to meet their consumer credit obligations and are no longer available.
Tip: Alt doc loans serve a similar purpose in allowing borrowers who don’t have all the traditional documentation available. However, they still allow lenders to meet their credit obligations.
Does Pepper Money offer a ‘No Doc’ home loan?
No, we don’t. We do offer alternative doc (Alt Doc) loans which can consider home loan applications with as little as 6 months ABN and GST registration. Meaning that once you’ve got your business setup, there’s no need to delay your property ambitions. Talk to one of our specialists to discuss what could work for you.
Alt Doc home loans
While alt doc home loans still require a full credit assessment, serviceability check and suitability assessment, alt doc loans allow borrowers to prove their income in other ways. Quite often a borrower’s ABN activity and business account statements will be used to validate income, rather than PAYG and tax return statements.
What documents can I use for Alt Doc home loans?
Our alt doc home loans consider a range of financial documentation which provides flexibility on how you prove your income or business activity:
A declaration of financial position plus one of the following:
- 6 months business bank statements (inclusive of last 1 month) or
- 6 months business activity statements (BAS) or
- Pepper Money accountant’s letter
How an alt doc home loan may be able to help
Flexible loan options, like alt doc home loans, could help self-employed and small business owners to buy their own home, invest in property or even grow their business. Our alt doc loan could help these borrowers to consolidate business debts, pay out tax debts, and pursue their property ambitions.
Contributor | Neil Culkin, Head of Credit and Settlements
Neil has a 20-year career in credit provision. At Pepper Money, he oversees the underwriting and credit control of all consumer finance loan applications. He is also responsible for updating lending policies and guidelines. Read more.
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Resources to help self-employed borrowers
Not sure if you can get a home loan while running your business? These great resources are here to help you get ahead.
Information provided is factual information only and is not intended to imply any recommendation about any financial product(s) or constitute tax advice. If you require financial or tax advice you should consult a licensed financial or tax adviser.
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