In Australia, a substantial portion of the workforce comprises self-employed individuals and independent contractors, totaling over two million. However, their financial circumstances often differ from those of salaried PAYG workers, leading to unique challenges when it comes to securing mortgages from traditional banks.
Self-employed Australians often face more rigorous eligibility criteria compared to PAYG workers. While PAYG employees can typically substantiate their income with just two recent payslips, self-employed individuals are required to provide two years' worth of financial statements and tax returns.
At Summit Funding, we understand the challenges that self-employed Australians face when seeking home loans. We offer a lifeline in the form of Alt Doc Home Loans, designed to cater to the needs of both individuals with clean credit histories and those with less favorable credit scores. Loans must be to a corporate entity and be for a business or investment purpose.
Our Alt Doc Loans aren't limited to a specific use; they can be used for purchasing a new property, refinancing an existing one, consolidating debt, or extracting cash, provided that the loan is for a business entity and serves a business purpose.
**Flexible Loan-to-Value Ratios (LVR)**
With our Alt Doc Loans, you can access residential zoned properties with LVRs of up to 85%. For vacant land or construction projects, the LVR is set at 75%. We aim to provide flexibility and options that align with your project's unique requirements.
**No Tax Returns Required**
Summit Funding recognizes that not all self-employed individuals have the luxury of having lodged tax returns. We make it possible to secure a loan without the need for these documents. Instead, we require the following to verify your income:
1. Six to twelve months of lodged BAS Statements from the ATO Portal.
2. An Accountants Letter confirming your income.
3. Three to twelve months of business bank statements.
4. Old tax returns (over 24 months) accompanied by current financial statements.
5. Loans are also available based on asset lending for business purpose with no proof of income required.
**Variable Loan Amounts**
We offer variable loan amounts to suit your needs:
- Up to $1,000,000 at 85% of the property's value.
- Up to $2,000,000 at 80% of the property's value.
- Up to $2,500,000 at 70% of the property's value.
- Up to $30,000,000 at 60% of the property's value.
High LVRs of 85% are primarily available in high-population areas, such as capital cities or major regional cities and towns. In regional areas, lower loan values may apply. Additionally, we offer loans without the need for financials, with the loan amount determined based on the security being offered.
**Assessing Low Doc Loans**
While each lender may have its own unique policies, some standard criteria typically apply:
1. Length of ABN / GST registration: Most lenders require an ABN to be registered for at least 12 months, with some willing to consider a registration as recent as three months.
2. LVR: The maximum LVR is 85%, with Summit Funding being able to arrange funding for new companies with an ABN as fresh as one day old.
3. Reasonable income declaration: Lenders assess income in relation to the business and the applicant's age, assets, and overall financial situation.
4. Clean credit: Lower rates are typically available to applicants with clean credit records, although we can accommodate credit impairments up to 85%.
5. Security: Properties located in low-population areas, those in need of significant repairs, or those challenging to sell may not meet the criteria for acceptance.
**Factors Affecting Interest Rates**
The rates on our Alt Doc Home Loans are influenced by several key factors:
1. Loan-to-Value Ratio (LVR): Lower LVRs result in reduced risk, leading to lower interest rates.
2. Location: Capital cities generally enjoy lower interest rates.
3. Credit History: Applicants with less-than-ideal credit may encounter higher interest rates.
**Consider Opportunity Costs**
Self-employed individuals may be tempted to wait until they can provide two years of profitable tax returns before applying for a loan. However, this delay may result in opportunity costs, such as missing out on favorable market conditions. These costs can outweigh the benefits of securing a low doc home loan promptly.
At Summit funding we specialize in Alt Doc Loans. Whether you have a clean credit history or credit impairments, we have multiple funding solutions.
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