When you have bad credit, finding a lender to lend you money against your property can be challenging, however couple this with low doc, this makes the lender options even less.
Trying to find a loan when you have a bad credit rating can be challenging. However, couple this with low docs and you could find yourself limiting your lender options even more.
Is it possible to get a low doc loan with bad credit?
The answer here is definitely yes. There are several lenders who give you a low doc loan with bad credit. Low doc loans with bad credit are almost exclusively found with non conforming lenders!
Are low doc loans with bad credit more expensive?
Low doc loans with bad credit are generally more expensive. This is because there is a 2 fold risk in these loans. First is the inherit risk of lending to a borrower without evidence of proof of income. The second is the borrower already has bad credit history. This risk profile warrants a higher interest rate . The more serious the bad credit problems are, the more expensive the rate will be.
What is the maximum LVR you can borrow under Low Doc with Bad Credit?
As a general rule, most lenders who will lend low doc with bad credit will lend up to 80%LVR. However with 2 lenders this can be pushed up to 85%LVR. The LVR will depend on the level of bad credit; for example if the bad credit was more than 12 months ago, or if the bad credit is still outstanding or current. If the bad credit was more than 12 months ago or so, then the borrower could get a higher LVR. If the bad credit is still current and outstanding then the LVR will be lower.
Do Low Doc lenders with bad credit ask for BAS (business activity statements)?
No. The request for BAS is dependent on the lender. However, it is worth noting that with the introduction of the NCCP Act and Responsible Lending Guidelines, many Low Doc lenders who approve bad credit are asking for additional verification of income declared.
What other methods of income verification are lenders who approve low doc loans with bad credit asking for?
Lenders who do not ask for BAS usually ask either for an accountant’s letter, which is usually in the form of template the accountant completes, or business trading statements to verify the income declared by the borrower.
The accountant’s template usually states that the income declared by the applicant in the low doc declaration is ‘not unreasonable.
The verification of income using business trading statements is a rule whereby the turnover in the business trading account over 12 months is used to verify the income using the 40% rule. That is, 40% of the total turnover is considered the net income for the borrower.
What types of loans can I get when my situation is Low Doc with Bad Credit?
Most loan types are available if you are low doc with bad credit. These include;
- Home loans
- Fixed loans
- Basic loan
- Construction loans
- Non genuine savings loans
- 100% offset loans
- Refinance loans
- Commercial loans
- Leasing and car loans
- Development loans
- Business loans
Can I get a low doc loan with bad credit in company or trust name?
Low doc loans with bad credit can be done in all name types. These include;
- Personal/individual name
- Company name
- Trust name
- Business names
At Mortgage Providers we have access to all the lenders who will provide a Low Doc loan with bad credit. Further we know the pricing, policies and procedure models for each of these lenders. We know where to get the most flexible product coupled with the cheapest rate.