We have specialised in low doc loans for over 10 years. These simple low doc loans require less paperwork. They can be used for purchase or refinance. Lenders include banks, non banks and private funding.
As a guide, most low doc loans require 2 years ABN and gst registered, clean credit, and up to a max LVR of 80%
Low Doc Loans Specialists
Low Doc Construction Loans
Must be constructed by licensed builder.
Documents needed:-
Accountant’s declaration
Building contract or construction tender
Stamped council approved plans
Project Specifications and schedule of finishes
Construction certificate or building permit
Builder’s insurance
Builder’s risk insurance
Builder’s public risk insurance
For multi units:-
Just released.
Low doc loans for yellow goods.
No financials
No BAS
No accountants letter
No trading statements.
Must have clean credit and be for business use.
Includes, fork lifts and materials handling, excavators, diggers, skid steer loaders, trailers, tankers and earth moving equipment.
Similar criteria to low doc car loans:-
To qualify for these low doc yellow goods loans the excavator must be purchased from a licensed dealer.
Low Doc loans for yellow goods – property owner – NO DEPOSIT LOAN
Low Doc loans for yellow goods – non property owner
Please note this low doc loans product is only available for commercial clients where bona fide business use can be verified.
Low Doc Home Loans interest rates.
Interest rates for low doc home loans can and do vary widely.
Currently there are three year fixed rates starting from 5.57% (CR 6.11%). This low doc home loan is available through non bank channels. It is generally in line with normal home loan rates. Remember, you cannot walk into one of the big four banks and get this loan.
For Low Doc home loans, normally, if the LVR is 60% or less then the interest rate for low doc home loans is similar to or the same as normal home loan rates. When the LVR starts to increase or there is some form of credit impairment that the spread between low doc home loans and normal home loans will start to widen.
Having said that, be careful in regards to which low doc home loan lender you go with. Lenders generally have the right to vary interest rates even after the low doc home loan has started.
There may be a perception that by going though one of the big four banks you will get a good low doc home loan rate.
however, the Commonwealth Bank (CBA) has recently advised its broker network to contact their low doc home loan customers to advise them that the bank will be raising the interest rates for some existing low doc home loans customers by 0.25%
CBA has said that it would be writing to all its existing low doc home customers with loans that were funded before 1 April 2012 to advise them interest rates will be lifted unilaterally. This means even though other rates are falling the rates for low doc home loans customers will increase mid December 2012
How significant is this move for low doc borrowers?
Well, to put things in perspective it is believed that CBA currently has over $5 billion, yes $5 billion worth of low doc home loans on its books.
It is now common knowledge that the low doc loans of old have gone. Previously if you had an ABN, had a 20% deposit, and completed a self-certified income declaration then it was fairly simple to get a low doc loan.
As the low doc market matured many of the major banks were lending at interest rates the same as or similar to normal full document home loans. This scenario could not last as it did not take into account the risk profile of low doc loans.
With the advent of the GFC and responsible lending low doc loans changed. This was a change for the better. What it did mean was income was now verified to a higher degree than previously.
This didn’t mean a return to full tax returns. It did mean alternative ways were looked at in substantiating income.
These generally include one of the following:-
The alternative ways of assessing income, including the insistence of two years abn and gst registration by most lenders now mean that income verified under low doc loans is more thorough.
Having the abn and gst registration for two years shows the business is ongoing.
There are commentators that predicted the demise of low doc loans for many years. At this stage they have been proved wrong.
Low doc loans are and always will be a part of the home loan market. Many low doc loans are still be written and this shows no sign of changing.
A lot of pundits forget that many of Australia’s small businesses are Australia’s wealth generators!
A Low Doc Loan with a maximum LVR of 70% and NO Lenders mortgage insurance and a cheap interest rate.
Low doc Loans requirements
What documents do you need to provide for this low doc loan?
How is serviceability calculated for this low doc loan?
What do you get?
It is important to note The Profit and Loss does not have to coincide with a financial year. Just require a 12 month profit and loss for any 12 month period
Here is a low doc loans example:-
Business commences just over two years ago. For the first full financial year, business was in a start up phase and made a loss. This is normal For the last 12 months, business has gone strongly. Under this product there is not an averaging of figures, we are taking the latter profit figures produced. You can supply a signed Profit and Loss for the last 12 months (where you will be showing the majority profit) plus BAS for the same period + any other income.
All the above is a guide only. All low doc loans are subject to a lenders credit criteria.
Need more help call us on 1300 LOW DOC
Bankwest low doc loans have been temporarily withdrawn. These low doc loans were popular as they only required an accountants sign off which was within the low doc loan application form.
Low Doc Loans cash out. New Low doc Laon Product will allow up to $250,000 cash out.
Product Highlights include;
• Maximum LVR of 75%;
• Maximum loan size $1m;
• Security must be in a Category 1 location and must have a building on it. (No vacant land);
• 12 months ABN – Supported by Accountants Declaration
• No Defaults, Mortgage Arrears or Bankrupt History;
• ATO debts ok;
• Non performing unsecured debts ok;
• Unlimited debt consolidation;
• Access to generous cash out (amounts up to $250k with stated purpose only / over $250k the borrower will need to supply a Stat Dec outlining purpose of funds).
Want to know more call us:-
Low Doc Loans rates are moving up as predicted. The interest rates for fixed low doc loans and variable low doc loans are heading up.
Since the beginning of 2012 we have seen the rate for low doc loans start to get more expensive. If you currently have a low doc loan and your rate is above 6% please call us on 1300 LOW DOC. Hurry this rate for low doc loan refinances will not last long.
Update March 2012
Both low doc loans refinance and low doc loans purchase are still available with no application fee and no monthly fee up to 60%
The rates for low doc loans have now continued to move up. The 5.99% interest rate has now gone. If you are still quick you still may be able to lock in a rate below 6.1%
Remember these low doc loans require no BAS and no accountants letter. However, 12 months business bank trading statements is needed to show strong income.
Hurry
Call us on 1300 LOW DOC
Interest rates for low doc loans for cars have been again reduced. The rates have been reduced by another .25% This lowering of the rates is good news for small business owners. For all low doc car loans the vehicle must be used for business or commercial use.
To qualify for these low doc loans for cars the applicant must be either a sole trader, partnership or company. The small business owner must be ABN and gst registered for a minimum of two years. If you are a property owner it may be possible to do a vehicle no deposit low doc loan. For full details see page on Low Doc car Loans.
Everyone is now aware low doc loans are definitely harder to get than a few years ago. Having said that, as people become used to the new credit environment, we are now seeing customers start to offer BAS statements. This didn’t occur previously.
It seems people are now being conditioned by the banks that more paperwork is required when applying for low doc loans. The normal options are either Accountants letter, BAS statements, or trading statements. This extra paperwork applies to residential property low doc loans which are governed by the NCCP.
In regards to commercial low doc loans, in many cases we don’t require all this extra paperwork. We have recently been offered access to funding large low doc commercial loans with a minimum loan size of $3m. As well as the large low doc commercial loans there is now development finance becoming available for deals that the banks wont do.
As always, if you have a scenario regarding low doc commercial loans please call us.
Low Doc Loans with No BAS and no accountants letter are still available. For this low doc loan an ABN for two years and gst registration for one year is required.
These low doc loans will require twelve months trading statements for the self employed entity that is generating the income.
Currently there is no application fee, no ongoing fee and no early repayment fee with these low doc loans.
Why are you being asked for bank trading statements for the business entity generating the income?
Because under the new NCCP legislation we must make reasonable enquiries to verify a borrower’s financial situation and objectives.
As well as self certification, lenders have been asking for supporting information, such as:
• bank statements
• cash flow forecasts
• wages/income verification
• accountants verification, etc
For this particular loan BAS are not required. Instead, the bank trading statements are needed to show income going through the business entity.
Starting today, Loan exit fees are banned. This includes low doc loans.
This new measure has been designed by government to make home loans more competitive..
“Part 7-2A ‘Prohibited credit fees and charges’ of the National Consumer Credit
Protection Amendment Regulations 2011 (No. 2) prohibits charging customers
termination fees if a credit contract is entered into on or after 1 July 2011.
Some non banks were charging very high loan exit fees, such as 1 or 2% of the original loan amount. They were so high they wiped out any savings consumers might get from switching to a cheaper home loan with a new lender.
Of course new loans, including low doc loans will not have loan exit fees, however there are a lot of low doc loans out there with deferred establishment fees already in place.
This increased competition will make it easier to switch to a better home loan deal if you become unhappy with your current home loan.
It means more financial choices and if lending institutions introduce unfair fees they can be fined.
For more information see the government home page of Banking Reforms.
As well as a lot of news in the media about low doc loans there is also a lot of comment about what is happening to investment property prices. With so much differing comment out there in the news it is difficult to know what is really happening, and where the market is heading.
Would you like a property market update?
Please note this report is free and very detailed. It contains a lot of information.
If you would like a free property market update, then please visit the Investment Property website, fill out the form and you will be emailed a free property market report.
The report contains a snapshot of what is happening in the major cities, house and unit prices, changes in dwelling values, and capital cities capital growth and sales volume.
The report is over 20 pages in length. For full details of what is contained within the report see Investorpac.
LOW DOC Car Loans
Low Doc car Loans for purchases are still available in 2015 as long as the vehicle being purchased is to be used for a commercial, or business purposes.
Low Doc Car Loans with:-
No BAS
No Tax returns
No Accountants letters
No mortgage insurance
To qualify for low doc car loans you must have an ABN for at least 24 months, and have clean credit. The vehicle must be purchased from a licensed dealer.
For full details and rate see Low Doc car loans
As everyone is now aware, all residential lending is now governed under NCCP. This can only be a good thing going forward, as it will lead to even more responsible lending. Contrary, to what some media commentators are saying Low Doc Loans are not dead. The whole principal of lending is that borrowers should be able to repay their loan comfortably.
So what does this mean for low doc loans? It means any low doc loan must now be verified in one of three ways. Either bank trading statements, BAS or an accountant’s sign off only. Of these three, we have found the third option is the most popular. This makes sense, as many accountants have known their customers for a long time and are intimate with their businesses. So, if you are looking for a low doc loan, and have an accountant that is able to sign off on your declared income, please call us on 1300 LOW DOC
From Jan 1 2011, banks have brought in guidelines to comply with the new National Consumer Credit Protection Act (NCCP). Lenders now require evidence that you are able to repay a loan. This means that low doc loans now generally need, either BAS statements, trading statements or an accountants letter, to show that the customer can service a loan.
Low Doc Loans are not dead! Low doc loans are still available, however, they now require more verification.
With the banks adopting more cautious lending policies it would appear the self employed, as the largest group of low doc loans borrowers, have been the hardest hit by both the GFC and NCCP. As with anything new it will take time to adjust, however, eventually small business owners will adapt to the new credit environment we are in.
ANZ has now joined with the other banks to implement changes to its ANZ low doc loans. This is in line with the responsible lending guidelines under the NCCP. Westpac has been for a long time requiring BAS statements on its low doc loans. CBA has just recently changed its lending criteria and low doc loans policy and now require BAS on all low doc loans irrespective of LVR. Suncorp also require BAS on all Suncorp low doc loans.
So in conclusion, the lending criteria for major banks is now changing rapidly, and BAS is now part of the landscape.
We are now seeing low doc loans harder to obtain.
There has been a real tightening of credit policy by the banks. The days of the low doc declaration only have disappeared. Banks are now starting to take a “limited income evidence” approach. CBA have just changed their low doc loans policy to require BAS statements on all low doc loans.
Further, we have just seen RAMS Home Loans founder John Kinghorn warn that home loans to self employed may dry up.
What does this mean for those looking for low doc loans?
Lenders are looking for further verification as to the income declared. This can take the form of bank trading statements, BAS statements or an accountants letter.
Currently the more difficult low doc loans are 80% low doc refinances and construction.
Low Doc Construction Loans
There is no question that funding for low doc loans has tightened. Having said that, to compensate for that tightening, during the month of September we have seen new sources of funding become available. We now have access to a new 65% product for low doc construction loans in the Sydney metropolitan area. It does not include credit impaired low doc loans.
Note:- Construction cannot have commenced
Development finance funding guidelines are as follows:-
Development Funding
Lender can consider funding for multi dwelling developments to a maximum amount of $5 million.
Basic criteria:
** No pre-sale requirements for developments falling within below criteria:
Below is a list of questions / information requirements which will assist in determining if a development scenario falls within the lendrs acceptance criteria:
If you require a low doc construction loan, please call us for a competitive estimate on 1300 LOW DOC
Low Doc Loans 70% refinance with no mortgage insurance.
• NO LMI applicable between 60% & 70%
• Max loan amount $1.5m on single security and $2m for multiple securities
• Available for purchases and refinance (no cash out or consolidation of unsecured debt)
• Refinance business debt up to 20% of loan amount
• Company and trust borrowers acceptable
• Construction available
• Bridging Finance
• 100% Offset
• Lo Doc to full doc conversions available anytime
• BAS and Bank Statements
• Lo Doc declaration & Accountant verification
Low Doc Commercial loans are still available up to a maximum LVR of 80% on good commercial properties in major metropolitan areas. The maximum loan size at 80% is $1 million. Larger loans are available at lower LVRs.
Applicants, which can also include companies, must have clean credit and current loan must have been paid on time. This is to be shown through six months loans statements. Specialised securities are not acceptable at 80%. Can be for both owner occupiers and investors. Must have 2 years ABN.
Max interest only period is normally five years.
True term loan.
Interest rates for Low Doc Commercial Loans
Since the Global Financial Crisis there has been a gradual tightening of credit policy. This has been particularly evident in the case of low doc loans. It has been especially noticeable with the major banks. We are often receive a call where the customer is with a particular lender, they have gone to get a top up or change their existing loan and are now subject to the bank’s new lending criteria. A prime example is where the loan was written as a Low Doc Loan a few years ago, and when a top up is requested, the bank is now requiring BAS statements.
Some Low Doc Loans that were written a year ago, or even six months ago are just not able to be written today.
As well as tightening of credit policy, mortgage insurers such as GE and QBE have also tightened and to top it off some of the major banks are now credit scoring.
So what is the answer? The general rule is your first shot is your best shot. Make sure you are aware of what most lenders are requiring. As a guide, minimum two years ABN, registered for gst, clean credit, purpose of the extra funds outlined, and good repayment history. Be aware also, that once a loan has been to a lender and it has been knocked back, it may be harder to get it approved the second time around with a different lender due to credit scoring.
In summary, even though credit for low doc loans is more difficult, low doc loans that satisfy the above criteria do have more chance of being approved. Now, more than ever, it pays to get it right the first time.
Low Doc Loans can be used to refinance existing home loans at 80%, however they are harder to get approved due to the tightening of credit criteria by the banks.
As a guide the loan being refinanced should be a full document loan and if there are any extra funds being requested then the purpose of these extra funds must be clearly stated.
Full Doc Loan to Low Doc Loan at 80%
For 80% refinance low doc loans
Require:-
Low Doc Loan to Low Doc Loan at 80%
If the loan being refinanced is a low doc loan and you want to refinance to 80%, the purpose of the extra funds must be clearly explained. The applicant must be clearly able to demonstrate capacity to repay the loan.
Require
Large low doc loans are still available. Many lenders are now capping out their maximum low doc loan amount at $1 million. There is still funding for large million dollar low doc loans above this figure. As a guide you are looking at 1% set up costs and a normal investment home loan rate. Maximum 60% LVR and sound residential security. Cash out available in certain circumstances. Ideal for purchasing or refinancing prestige property.
Updated March 2012
Large Low Doc loans are still available up to $1.5m in major metro areas. If you are looking for a jumbo low doc loan over $2m then these may be available however they are discretionary. The applicant needs to have clean credit, have a strong asset and income position. BAS are not required and neither is an accountants letter. What is required is evidence of strong bank trading statements for the last 12 months.
The maximum LVR is up to 60% of the property value, with a lower LVR being preferred.
Please call us on 1300 LOW DOC 1300 569 362
Effective Close of business 30 April 2010 Bankwest Low Doc Home Loans will be withdrawn from sale.
What does this mean?
Refinances will no longer be available, using a Bankwest Low Doc Loan.
For purchases there will be the re launch of the Easy Doc Product. This means there will only be one rate irrespective of the LVR. The Easy Doc Home Loan will automatically roll to the Lite Home Loan after the 3rd year anniversary date.
Updated March 2012
Bankwest Low Doc Loans have the following features:-
BankWest Low Doc Home Loan
No BAS
No monthly account fee
A straight-in variable rate home loan product for self-employed borrowers.
Self declaration form with an accountants sign off
New Purchases max lend = 80% LVR – $1m
Max lend $2.5m per loan without LMI
Refi available only on land to 60% where obtaining construction funds
100% offset account available
No trading statements required
Can roll to any product if satisfactory conduct throughout previous two years
LVR = 60%
LVR = 80%
Refinancing Low Doc Loans
Bankwest will still not do refinances with their Low Doc Loan product, however we do have other lenders that will refinance Low Doc Loans up to 80% of the value.
Purchasing
Bankwest will do purchasing through their Low Doc Loans and have two tiers. One low doc loan is done up to 60%. The other low doc loan is done up to 80% and is at a slightly higher rate and will need to be mortgage insured. Both Bankwest Low Doc Loans require an accountants letter, however, if you need an alternative without an accountant’s letter this is possible. With the alternative the main criteria is there must be substanial deposits into the business entity’s bank trading account for the last 12 months.
Want to know more please call us on 1300 LOW DOC, 1300 569 362
Low Doc loans are historically divided into two categories. Low Doc Loans without mortgage insurance and low doc loans that are mortgage insured.
60% LVR
Generally low doc loans 60% or less do not require mortgage insurance. For this reason they are easier to qualify for. However, they do require 40% equity.
Up to 80%
These low doc loans are normally mortgage insured, however, it is possible to get 80% low doc loans without BAS, without mortgage insurance. For the mortgage insurance low doc loans, one of the first things looked at is the postcode. In many cases, the postcode of the security property will determine what level the mortgage insurer will go to. To search these mortgage insurance postcodes, click on this location wizard, and enter your postcode.
The figure under LMI Self Certified is the maximum loan size the mortgage insurer will consider in that postcode.
If your postcode returns “On Application”, then this generally indicates that in the eyes of the mortgage insurer the security area may not be as strong.
Low doc Construction loans are still available for building residential homes in major metropolitan areas. An interest only low doc loan during construction.
At 60%, can be done at or near normal home loan rates. The applicant must be an individual and there cannot be more than one building constructed.
A Low Doc Loan Construction at 80% can also be done, however there will be a slight loading due to the extra risk.
It is preferable to have stamped council approved plans and specifications, however if required the land only may be settled first.
Builder must be a major licensed major builder, have builders insurance and applicant must have clean credit.
For both of these types of low doc loan need 2 years ABN and registered for GST. No BAS or trading statements required.
Building will be inspected at each stage of progressive drawdowns.
Call 1300 LOW DOC ( 1300 569 362) now to see if you qualify.
CBA Low Doc Loans and ANZ Low Doc Loans have both moved quickly to increase their rates by 0.25%
St George Low Doc Loans and Westpac Low Doc Loans have held off moving more than the RBA rate increase as well.
Both the CBA and ANZ will also increase their deposit rates by 0.25% as well
Are rates heading back to normal?
What’s normal home loan rates?
As a footnote to the above, ANZ Low Doc Loans are no longer being done at 80%. CBA and many of the major banks are now requiring BAS statements with their 80% low doc loans. Given this need for BAS is this really a low doc loan? There are still alternative low doc lenders out there at 80% for both purchases and refinances that do not need BAS.
Rural low doc loans now available for loans that have an investment purpose. Generally for a year only, so there needs to be a clear exit strategy so the loan can be paid back. These types of loans are normally low LVR, and it is preferable there is a building on it, although not mandatory.
85% LVR Low Doc Loan for clean credit still achievable in major metropolitan areas.
Also Low Doc Loans for vacant land are still attainable as long as land has an investment purpose. A low doc loan for vacant land is similar to a Serviced Apartment Low Doc Loan and is considered on a case by case basis.
Looking for a low doc loan for your motorcycle purchase, or a marine low doc loan? then call us 1300 LOW DOC
Low Doc Loans 80% No BAS now available for refinance and purchase. No Business Activity Statements required. Clean credit only.
Available in major metropolitan areas. Must be zoned residential and have a building in sound condition on the property.
Rates are different dependent on upon whether it is a refinance of an existing low doc loan, or a purchase. Rates as per the home page.
If you are in Sydney, the rate may be cheaper for the LOW DOC 80 with NO BAS NO ABN refinances.
Low Doc Construction 80% LVR with No BAS returns also considered in major metropolitan areas. Tender must be from a major licensed builder.
Low Doc Business Loans may be available for applicants that want to purchase a new business. The low doc loan must be secured against an investment property. If the total lending does not exceed 65% there may be no need for ABN or GST registration as long as applicant has a strong asset position. This type of low doc loan is well suited for applicants in one field of work who wish to buy a small business in another industry e.g a bricklayer who now wants to purchase an established coffee shop.
The security property for the low doc business loan must be in a major metropolitan area.
Low Doc Loans LVR change.
Westpac
The maximum LVR on Westpac Low Doc Loans will be reduced from 82% to 80%, effective Wednesday 20 January 2010.
This change will also apply to existing customers that have low doc loans that need to be re-originated as a result of a top up.
If a customer pays the mortgage insurance separately (or upfront) the total low doc loan amount will still be 80%
RAMS
RAMS Low Doc Loans will be a maximum of 80% including mortgage insurance from Thursday 21st January 2010
As a footnote to the above, Westpac and many of the major banks are now requiring BAS statements with their low doc loans. Given this requirement for BAS, is this really a low doc loan? There are still alternative low doc lenders out there at 80% for both purchases and refinances that do not need BAS.
What’s the difference? As a guide
Low Doc Loans can be on either owner occupied, or investment properties.
They require an income declaration.
Should have an ABN for 2 years and be registered for GST.
A normal LVR is 60% without mortgage insurance, and 80% with mortgage insurance.
Rates on low doc loans are either at, or near home loan rates.
Normally a term loan of 25-30 years.
No Doc Loans
Must be on investment properties.
Do not require an income declaration, however will still need Assets and Liabilities position.
Do not require ABN or GST registration.
Normal LVR is 65%, however in some cases can go to 80%.
Rates are priced according to risk and are more expensive than low doc loans.
No Doc Loans are normally short term up to 3 years, however in some cases it is possible to go out to 25 years.
The above is a guide only and can change at any time.
Low Doc Loans may be back with AOFM investment.
Up to 10 per cent of loans funded under the next planned round of $8 billion in investment may be low doc, though still secured over the borrower’s home….
Full article from The Sheet
Westpac low doc loans rise .45% after RBA only moved .25%. This move by Westpac is proof that banks do and will move low doc loan rates as they please. Often we hear from low doc loan customers that they are concerned the non banks may be more expensive.
This move by Westpac clearly dispels that argument.
Treasurer, Wayne Swan has been less than impressed with Westpac’s extra rate increase!
St George Low Doc Loans will go up .39%
Citibank Low Doc Loans to increase .39%
CBA low doc loans will rise by .37%.
ANZ low doc loans to go up .35%
Bankwest low doc loans move .35%
The rate for low doc loans is partly driven by RBA interest movements.
RBA interest rates are normally set when the bank meets on the first Tuesday of each month, except January.
2009
RBA interest rates for 2009
• Tuesday, 3 February 2009 rates decrease 1%
• Tuesday, 3 March 2009 No change
• Tuesday, 7 April 2009 rates decrease .25%
• Tuesday, 5 May 2009 No change
• Tuesday, 2 June 2009 No change
• Tuesday, 7 July 2009 No change
• Tuesday, 4 August 2009 No change
• Tuesday, 1 September 2009 No change
• Tuesday, 6 October 2009 rates increase .25%
• Tuesday, 3 November 2009 rates increase .25%
• Tuesday, 1 December 2009 rates increase .25%
At the RBA meetings, when they move their rates, the variable rates for low doc loans normally move as well. Having said that, the major banks can, and do move their rates when and how much they want.
As a guide, and a guide only, you can expect the variable rate for most low doc loans to sit between 2 and 3% above the current RBA cash rate target.
2010
RBA interest rates for 2010
• Tuesday, 2 February 2010 rates on hold
• Tuesday, 2 March 2010 rates increase .25%
• Tuesday, 6 April 2010 rates increase .25%
• Tuesday, 4 May 2010 rates increase .25%
• Tuesday, 1 June 2010 No change
• Tuesday, 6 July 2010 No change
• Tuesday, 3 August 2010 No change
• Tuesday, 2 September 2010 No change
• Tuesday, 5 October 2010 No change
• Tuesday, 2 November 2010 increase .25%
• Tuesday, 7 December 2010 No change
2011
In 2011, at the RBA meetings, the bank has set the rates as follows:-
RBA interest rates for 2011
• Tuesday, 1 February 2011 No change
• Tuesday, 1 March 2011 No change
• Tuesday, 5 April 2011 No change
• Tuesday, 3 May 2011 No change
• Tuesday, 7 June 2011 No change
• Tuesday, 5 July 2011 No change
• Tuesday, 2 August 2011 No change
• Tuesday, 6 September 2011 No change
• Tuesday, 4 October 2011 No change
• Tuesday, 1 November 2011 decrease .25%
• Tuesday, 6 December 2011 decrease .25%
2012
• Tuesday, 2 February 2012 No change
• Tuesday, 6 March 2012 No change
• Tuesday, 3 April 2012 No change
• Tuesday, 1 May 2012 decrease .5%
• Tuesday, 5 June 2012 decrease .25%
• Tuesday, 3 July 2012 No change
• Tuesday, 8 August2012 No change
• Tuesday, 4 September 2012 No change
• Tuesday, 2 October2012 decrease .25%
• Tuesday, 6 November 2012 No change
• Tuesday, 4 December2012 decrease .25%
2013
• Tuesday, 5 February 2013 No change
• Tuesday, 5 March 2013 No change
• Tuesday, 2 April 2013 No change
• Tuesday, 7 May 2013 decrease .25%
• Tuesday, 4 June 2013 No change
• Tuesday, 2 July 2013 No change
• Tuesday, 6 August 2013 decrease .25%
• Tuesday, 3 September 2013
• Tuesday, 1 October 2013
• Tuesday, 5 November 2013
• Tuesday, 3 December 2013
The current RBA cash rate target is 2.5%
The four major banks, CBA low doc loans, ANZ low doc loans, Westpac low doc loans, and St George low doc loans have all passed on the rate rise again, meaning the variable rates for low doc loans have risen by at least .25% again. This is on top of the .25% increase that occurred on Tuesday October 6 2009. Low doc loans have risen a total of .5% in the last two months. The next meeting of the Reserve bank is due for Tuesday December 1 2009. A media release normally occurs at about 2.30pm.
As the bank does not normally meet in January, the next meeting for the RBA after December 1 should 2 February 2010
GOVERNMENT TO INTRODUCE “POSITIVE” CREDIT REPORTING
Responsible lending under the proposed National Consumer Credit Protection Bill 2009 (NCCP) is designed to ensure that consumers are not provided or suggested unsuitable credit for their circumstances.
In early October, Senator Joe Ludwig, Special Minister of State, announced proposed reforms to the Privacy Act and Regulations. An exposure draft of the legislation will not be available until early 2010
The proposed reforms introduce “positive” credit reporting.
Introduction of five “positive” datasets in an individual’s credit report file would enable a more comprehensive assessment of a person’s credit risk. The “positive” datasets are:
1/ type of each credit account opened (e.g. mortgage, credit card, personal loan);
2/ date on which each credit account was opened;
3/ current limit of each open credit account;
4/ date on which each credit account was closed;
5/ credit repayment history, which will include whether in the past two years the individual has met repayment obligations.
Until responsible lending obligations under the NCCP Bill begin in January, 2011, credit repayment history data won’t be available.
However, repayment history may be reported from April 2010.
At the moment credit reporting is “negative”, therefore more limited, eg, it only includes information about any applications for credit and overdue accounts (defaults) etc.
For credit providers, the changes should mean there is more information available for the assessment of a consumer’s financial situation and thus meet responsible lending obligations. However, it may also mean some consumers are refused credit or are offered less.
The above is information only, which is based on a draft of the legislation. It is for general information only and should not be relied on as specific advice for your particular circumstances or as a substitute for professional advice.
With banks and mortgage insurers, it is becoming more difficult to get Low Doc loans with credit defaults. We have seen the mortgage insurers refuse to insure low doc loans with any sort of default. These low doc loans are commonly called credit impaired low doc loans. One of the main criteria looked at with these credit impaired low doc loans, is the size of the default and whether or not it has been paid, and when it was paid. Minor telco defaults, and defaults $1000 or under, for low doc loans may be looked at differently to larger unpaid defaults.
For low doc loans with larger defaults they are still available. As a guide these low doc loans, may be done for residential properties in major metropolitan areas and up to 80% of the value or purchase price.
For credit impaired low doc loans without BAS the following will also be required:-
The last 4 months bank statements for your business account, transaction account, and last personal bank account statement.
With credit impaired low doc loans each one is assessed on its merits.
Please call us on 1300 LOW DOC and we will let you know what pricing we can do for you.
Are Low Doc Loans still available without BAS? Yes. As the major banks have tightened their credit policy in regards to Low Doc Loans, it is true that they have become more expensive. The question is how much more? We are already starting to see some evidence of Low Doc Loans without BAS being quoted at high rates.
However, Low Doc loans without BAS are still available at or near home loan rates. If you are being quoted an investment interest rate that doesn’t begin with 5. something percent you may be paying too much. Generally, to purchase at the 80% mark, you will need clean credit, be registered for GST, it is preferable to have an ABN that has been registered for at least 2 years, and the residential property should be in a major area.
Of course all of the low doc loans applications are subject to a particular lender’s credit criteria.
With the large four banks increasing variable rates, Low Doc Loans are set to get more expensive. We are now also starting to see the emergence of two types of low doc loans. Low Doc loans with BAS statements and Low Doc Loans without BAS statements. Don’t be surprised if there is another rate increase for low doc loans before the end of the year.
We are also starting to see some lenders add a margin for the perceived increased risk of low doc loans.
Fixed rates for Low Doc Loans on the move up again. Low Doc Loans are getting more expensive. In the last six weeks we have rates for fixed rate low doc loans move over one percent.
As a footnote to the above, CBA are now requiring BAS statements with their 80% low doc loans. There is still alternative low doc finance out there at 80% for both purchases and refinances that do not need BAS.
RAMS has increased its fixed rates for low doc loans today for loans 1-5 years
Further effective 24 September 2009
All RAMS Low Doc loans applications are to be supported by the following:-
1. Business Activity Statements (BAS) for the past 12 months and ATO Lodgement Reference Number AND
2. The last 3 months account statements evidencing payment of tax as advised on the BAS.
As a footnote to the above, RAMS and many of the major banks are now requiring BAS statements with their low doc loans. With a requirement for BAS is this really a low doc loan? There are still alternative low doc lenders out there at 80% for both refinances and purchases that do not need BAS.
Low Doc Loans have been around for many years. Previously low doc loans were done through solicitors funds at around 66%.
Over time, the banks then started to slowly start to enter this space. In 2005, the RBA commented about Low Doc Loans.
For the full article.
With the beginning of the credit crisis in 2008, there was a general tightening of lending across the board. Much of this was to do with bad credit. There has been confusion between bad credit and Low Doc Loans. In Australia they are different. Most Low Doc loans in Australia are for self employed with minimal paperwork and are normally clean credit.
Standard & Poor’s in October 2009, has indicated Low Doc Loans in Australia are not a problem.
Standard & Poor’s has backed the government’s decision to direct the Australia Office of Financial Management to invest in residential mortgage backed securities with a higher proportion of small business loans when it invests the additional $8 billion the government has allocated to support new RMBS issues.
For the full article.
Low Doc Loans are still being written, but they change as the credit markets change. With the norm for the banks now being 60%, Low Doc Loans have effectively gone full circle. Low Doc Loans without BAS at 80% are still possible, however they will be priced according to risk.
With this in mind, even though lending for Low Doc Loans has tightened, with the credit markets starting to free up again, over time, Low Doc lending will also start to free up again as well.
If you want to know the future for Low Doc Loans, one guide is to look at the general credit markets. When things are perceived as bad, low doc lending will be tight. When things are perceived as optimistic, low doc lending will be more liberal.
Since writing this post in late 2009, in March 2010 Macquarie has already returned to the low doc market. This is an indication of where we are heading and it has happened quite quickly.
Given the current credit climate it may also be timely to remind customers of the risks associated with Low Doc Loans. The following from ASIC may help.
The above is information only and not advice.
