Low Doc Construction Loans is a type of building loans perfect for self-employed borrowers with no proof of income. There was a time when it was not possible to get a low doc loan for construction projects. Although, some major lenders are now more relaxed with their lending criteria. You could secure low doc finance for your next project.
How Much Can I Borrow?
You may be able to lend up to 80% of the cost of the construction work and land value. There are specific lending criteria:
You are a licensed builder or building with one.
Must have an Australian Business Number (ABN).
Provide proof of your income (in the form of BAS, a letter from an accountant or bank statements.
If you do not meet these criteria, you may still be able to get a development loan providing that you have a significant deposit.
To find out more about low doc construction loans please enquire online or call us on 1300 55 10 45.
Are you a Developer?
You can usually borrow the smaller of 80% of the project cost or 70% of the value on completion.
Banks do not usually approve low doc loans for developers because they have an unpredictable income and there are often long delays between completing their projects are receiving payment.
For this reason, there are special loans for developers. These loans have an established exit date and capitalised interest and this is to avert the need for repayments.
Can you get loan approval?
The majority of banks will only offer you a loan for your project if you are building with a licensed builder insured with Home Warranty Insurance (HWI) or equivalent.
Banks are seeking the safety provided by an official building contract covered by insurance.
Can you get low-interest rates?
Generally, the banks will not charge you a higher interest rate for a construction loan. Low doc or not, most banks will offer you the same rate as for purchasing a property.
What documentation do you need?
You don’t have to supply documents like tax returns, financial declarations or notices of assessment, however, you do have to show the bank an income statement and the all the specifics of your project.
Generally, you require the following construction documents; building contract and construction tender; stamped council approved plans (or draft); specifications and schedule of finishes; construction certificate (NSW) or building permit (VIC); builder’s insurance; and builder’s risk insurance.
If you provide us your builder’s details then we can organise it all for you.
Let us help you with your low doc construction loan! Call us on 1300 55 10 45 or enquire online. Our skilled mortgage brokers will get back to you to discuss your circumstances.
These loans can be used for developing the following:
Multiple units on one title
Other small developments
When should you apply?
You should contact us roughly four weeks before commencing construction.
It sometimes takes a few weeks to get your application back. Often the best lenders are the most popular.
Apply for a loan today
CALL US - 1300 55 10 45
Call and speak to one of our Customer Care team on 1300 55 10 45.
You should seek pre approval before entering into a Low Doc Construction Loans arrangement. The reason is simple, building is a complex excerise requiring good co ordination and technical skills.
Lenders are aware of the complexity construction builders face, and the possibility of costs over runs. This comes primarily from in-experience with managing this type of project. Hence most lenders are not generous when it comes to lending at high LVR’s on a Low Doc Construction Loans.
Our mortgage broking is second to none. Don’t waste your time and money running around from bank to bank, sifting through ambiguous loan offers only to find they don’t work. Take advantage of our expertise and let us find the right loan or finance to suit YOUR needs.