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'No Doc' lender needed

Discussion in 'Property Finance' started by SydPropInvestor, 29th Dec, 2015.

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  1. SydPropInvestor

    SydPropInvestor New Member

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    Hi fellow investors,

    Very long time lurking... first time posting. I am hoping one of the many great mortgage brokers who are active on PC can point me in the right direction:

    - My husband and I have a portfolio of 3 properties with a combined value in excess of $4m and LVR under 80% financed with a major bank.
    - We recently exchanged on another IP for $1.6 and need finance for $900k. Stupidly assumed current lender would process the loan with no problems. Our personal banker has recently left the bank so can no longer help.

    So now I'm stuck with no way to finance this loan which is due to settle in the next 2 weeks. Nightmare. We're both fairly recently self employed and don't have the requisite BAS statements for the usual major bank 'low doc' loans. So wondering if anyone can point me in the direction of an alternative lender who would look at a letter from an accountant/ bank balance as sufficient to loan $900k on a $1.6m deal. I know these types of arrangements are rare post GFC but thought someone here may have a solution. Also realise I may not be looking at the standard sub 5% rates that are usually on offer.

    Hope someone can point me in the right direction.

    Thanks in advance!
     
  2. Corey Batt

    Corey Batt Finance Strategist Business Plus Member

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    When did your new business start up? Do you have any BAS statements at all?

    There will be non conformers which may look at this - but don't even think about it being cheap.
     
  3. pinkboy

    pinkboy Well-Known Member Premium Member

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    No Doc.
    2 weeks to settle over holiday period.
    Self employed with no BAS.
    Need a million pesos.

    Ouch.

    Didn't occur to you at all to talk to your bank and advisors a little earlier?

    pinkboy
     
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  4. SydPropInvestor

    SydPropInvestor New Member

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    @pinkboy yes ouch. And yes I did have pre approval from exisiting lender before purchase. For reasons I don't want to disclose on public forum this has fallen through at this very last minute. Let this be a lesson to even the most cocky investor to have all your affairs in order before putting your hand up at an auction to grab a "bargain" :confused:
     
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  5. hobo

    hobo Well-Known Member

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    Yeah, from my (albeit limited) understanding, pre-approval = diddly.

    Tough position. Good luck!
     
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  6. pinkboy

    pinkboy Well-Known Member Premium Member

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    I'd call @Corey Batt at 8.30am tomorrow morning for a chat so he can ascertain your position.

    Failing that, bikies lend at 3%/month!

    pinkboy
     
  7. euro73

    euro73 Well-Known Member Business Member

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    You're going to need to provide a little more information.

    When was the ABN established?

    Are you registered for GST?
     
  8. York

    York Finance Broker Business Member

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    Get in touch with a broker now. The earlier you make a move, the greater your chance for success. There are some brokers here that have experience with these kinds of deals. I will say though that with 2 weeks till settlement it will be tight though.
     
  9. euro73

    euro73 Well-Known Member Business Member

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    If you have 2 weeks to settle - you need to contact someone today
     
  10. MTR

    MTR Well-Known Member Premium Member

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    What is the difference between no doc and low doc??? Not a trick question, just curious, obviously different product to many moons ago??
     
  11. Corey Batt

    Corey Batt Finance Strategist Business Plus Member

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    Lo doc has lower than standard verification requirements, ie may rely on BAS statements in conjunction with bank statements/accountant declarations.

    A no doc loan can be as little as a client or account declaration of income.
     
  12. MTR

    MTR Well-Known Member Premium Member

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    Thanks Corey, I am actually surprised that some of these products are around, but very good to fill the gaps when required.

    MTR:)
     
  13. jaybean

    jaybean Well-Known Member

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    What do you mean by not cheap. What's the ballpark here, 2% on top of the average? 5%?
     
  14. tobe

    tobe Well-Known Member

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    They mostly aren't around anymore.
     
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  15. wylie

    wylie Moderator Staff Member

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    I'm on a low doc at 5.9%. I am looking into refinancing now I have accountant statement for last financial year which should allow me to jump to a mainstream lender (although lo doc lender wants to keep me - waiting on details of their better offer than 5.9%).
     
  16. MTR

    MTR Well-Known Member Premium Member

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    I got my last construction loan for 4 townhouses RAMS @ 5%
     
  17. euro73

    euro73 Well-Known Member Business Member

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    The post GFC lo doc doesnt really look like the pre GFC lo doc.

    Pre GFC lo docs really just needed a 12 month ABN and a 20% deposit and a self declaration of income and you were all sorted.

    Post GFC lo doc requires a more significant degree of evidence to support those "claims" . While banks still dont ask for payslips or tax returns ( lets face it, if you had those you'd be a full doc borrower) they do ask for evidence of GST rego, usually want an ABN registered for a minimum 12 months and usually want 6 months worth of BAS statements and bank statements.

    All of which is designed to show that you are actually legitimately self employed, are actually running a real business that generates real turnover, and have been doing it for at least a year.

    There are a couple of exceptions to this, where lenders will accept an accountants letter confirming that your income is X, instead of bank statements and BAS statements, but those products are 30-40bpts higher than conventional lo doc.

    Then there are the "no doc" type products where 1 day ABN's with no BAS and no GST rego might fly, available at yet another price premium, and available from only a very small selection of lenders who now specialise in this kind of product... and the rate can vary wildly...

    These products are for those who literally need to get money at any cost, and should otherwise be avoided.

    The idea is to take them as a short term solution, and roll out to a conventional lo doc or full doc after 12-24 months

    You should also expect to pay a broker a decent brokerage fee for service, as you arent exactly a client that will ensure they dont get clawed back.