Non Conforming Home Loans
A non-conforming home loan is a type of mortgage home loan or refinancing loan where the lender does not require the borrower to meet certain requirements, such as having a substantial deposit or a high credit score. This means that borrowers who don’t qualify for conventional loans may get financing through this type of loan1. These loans typically come with a higher interest rate than a regular home loan, based on the perceived risk of lending2.
The main documents required to verify your income for a low doc home loan are:
- 6 to 12 months of Lodged BAS Statements where the lender uses a formula of between 40 > 60% of Sales as income.
- An Accountants Letter verifying your income.
- 3 to 12 months of Business bank statements
- Old tax returns (over 24 months) with current financial statements.
Every lender has different policies, however there are some standard criteria.
- Length of ABN / GST registration: You need to have an ABN that has been registered (and possibly GST registered if sales are over $75,000) Most Lenders require ABN to be registered for at least 12 months. We have lenders who may accept an ABN registered only 6 months old.
- LVR: Maximum LVR is to 85%.
- Reasonable income declared for the business: Lenders assess if income and current assets are in line with Business and age. For example an 18 year old courier with no assets would be declined if they declared an income of $200,000.
- Clean credit: Best rates require clean credit applicants. We can lend to 85% with credit impairments allowed.
- Security: All Funders will take a risk on the applicant but not on the property. Properties that are in non metro or regional population areas or unique, requiring major repairs, dilapidated or difficult to sell are usually not accepted.
- Cash out: Our Specialist Lenders will allow cash out up to 85% LVR.
- Debt Consolidation: Our Specialist Lenders will allow Debt Consolidation to 85% LVR
