Rams withdraws lodoc

I hear today that Rams has withdrawn their Lodoc product in its entirety from mid-April.

Single sources of income documentation are becoming scarcer by the day according to my broker.

Hear all of the franchise owners are running for the hills so be interesting to see how this pans out.

 

From the 15th April they will stop accepting lo doc applications.

They had some great niches with the lo doc combo in that they did construction, multi units on one title, etc.

That said, there are still lenders that offer similar lo doc products and had better rates than RAMS.

Its unfortunate though that they have lost one of their biggest niches.

 

Apart from a lower level of documentation, what other benefits does a PAYG earner have in using a low doc product?

 

I used their construction loan product for my developments in Melb, good product. Shame

 

A lo doc product isn't designed for PAYG - it's more for a self employed applicant who lacks full financials for a full doc product.

So let me give you a scenario - applicant is an IT contractor who has spent the past couple of years overseas self employed and doesn't have financials. They came back to Australia in September 2018 and since then has been working.

He obviously doesn't have full financials but BAS statement or business statements or Accountant's declaration or a combination of the above show the income as x.

Therefore the applicant can use lo doc lending in leui of full financials. The rates aren't too bad at circa high 4's but the app fee is expensive at 1% of the loan amount.

There are heaps of other scenario but thats just one example.

Note that lo doc is not projected income as this is another product altogether.

 

Possible scenario is someone with dividend income

 

So, as an example, if you just bought $500k in shares, with 4% dividend yield, the low doc provider would immediately take the $20k in dividends into account in servicing calculation. Compared with a standard application with bank that would require (say) 2 years dividend history.

 

Depends.

If you were receiving $20k p.a. in dividends you could legitimately say you were earning $20k pa on a low doc application form.

 

So what can we use now? Stacks up to RAMS lo doc

 

Latrobe.....just be prepared to give your kidney as security also....

 

Thx good to know

 

No wuken forries...

What is the exit plan for ole USA?

 

I reckon when AUD hits 60 perhaps sell 2??
Or sell nothing???

Whats your exit plan??

 

Already executing it.....sold 2....about to build 2.....sell one for 250k profit....sell a block of land for 100k profit when it titles....over next financial year.....

Will take over 15-20 years to get to single digits...

No chance Aussie will hit 60 cents.....it is starting to wind back up....another commodities growth cycle is in the making.....

 

Really depends on what sort of lo doc lending you want in terms of policy mix (say construction, cash out policy, etc) and documentation (some require just an Accountant's letter and other require a combination of BAS statement, business transaction statements, accountant's letter, etc)

You can do lo doc with Resimac at 4.99% for IO investment (1% app fee) and they have an excellent overall policy, such as great cash out, excellent borrowing capacity, Accountants Declaration, etc however they dont do construction lending like RAMS, Pepper have a similar product in terms the above but their rate is higher and they do construction lending.

RAMS' sweet spot was the construction and lo doc lending cocktail and the multi unit and lo doc cocktails. No one did it as cheaply as they did so again its sad that competition has fallen.

 

Thanks Shahin
Good to know

 

More changes - sometime may 2019 RAMS will be amending their self employed income policy whereby they will request 2 years financials (change from needing only 1 years financials).

This is a massive surprise since the larger associated entities Westpac and St George "currently" have a one years financials policy for LVRs up to 80%.

 

Any update re RAMS low doc? I hear they may get back into this space?
Additionally, What's the most competitive low doc loan out there at the moment for cash out. I have a Latrobe low doc loan and rate is ridiculous. I need to negotiate or move my loan.