No Doc Home Loans
No doc loans aren't offered by lenders anymore. However, you could still qualify for a low doc loan instead.
What is a no doc home loan?
A no doc loan is a ‘no proof of income’ home loan option that doesn’t require as many financial documents as in a regular home loan.
If you’re self-employed, a contractor or professional investor, you may find it difficult to provide all of the financials the bank requires to assess your home loan.
That’s when a no doc (or no documentation) home loan option is the best solution for you.
How do no doc loans work?
The concept of a no doc home loan is to help self-employed borrowers who don’t have access to regular PAYG payslips or other documents to prove their income.
Most financial institutions don’t deal in this space as such types of loans pose higher risk to lenders.
Lending criteria for no doc loans
No income evidence
Unlike a low doc loan, you don’t need to provide any evidence of your income.
This means you don’t need tax returns, BAS statements, an accountant’s letter or bank account statements to verify your income.
Please be aware that some lenders will still ask you to sign a statement of your assets and liabilities or a declaration that confirms that you can afford the loan.
If they ask you to sign a declaration, then it will not ask you to confirm your income, just that you can afford the repayments.
Loan purpose
Your loan must be NCCP unregulated. This means that your loan must meet one of the below criteria:
- Your loan must be for business purposes, or
- Your loan must be secured by a commercial property, or
- Your loan must be for investment purposes (other than in residential property), or
- Your loan must be in the name of a company or trust with an ABN.
Credit history
Whilst some no doc lenders will approve a loan for someone with an impaired credit history, this isn’t the case for all lenders.
If you have a problem with your credit history then you’ll almost certainly pay a higher interest rate.
Exit strategy
No doc loans aren’t normally designed to be for a long period of time.
In most cases, they have a term of 6 months or 3 years and then their interest rate will increase.
Lenders want to know how you have an exit plan to repay the loan.
In most cases, the borrower plans to sell the property or another asset to repay the loan.
FAQs
Do no doc loans still exist?
No, lenders do not offer no doc loans anymore.
You could still qualify for a low-doc loan. Discuss your situation with our specialist mortgage brokers.
What are the interest rates?
Can I still get the same home loan packages?
Why do they call it an 'asset lend'?