Are you self-employed or a sole-trader looking to apply for a home loan? If you don’t have the traditional documents needed for a bank loan, it can feel like your property dreams are out of reach.
If you’re unable to qualify for a traditional loan, even though you can afford it, a low-doc home loan could be the solution. These loans - otherwise known as Alternative Documentation Loans (Alt Doc) - are a way to acquire a home loan for people with income and assets but without the regular ways to prove this.
Let’s take a closer look at who low-doc loans are for and what’s required to qualify.
Low doc (low documentation) home loans are for people who are not salaried employees, with variable income, who are unable to meet the criteria to qualify for a regular home loan.
A low-doc home loan simplifies the lending process by reducing the number of income verification documents required. Unlike traditional loans, where lenders typically rely on payslips and tax returns, low-doc loans consider alternative, more flexible proof of income to assess your financial stability. This can include an accountant’s letter, business activity statements (BAS) or bank statements to prove your income.
Low-doc loans are designed for self-employed individuals, freelancers, contractors, and those with irregular income patterns. If you fall into one of these categories, a low-doc loan might be the right solution for you.
Let’s now look at what conditions are attached to these types of loans.
Low-doc loans typically come with different lending conditions and restrictions to a traditional home loan.
They often have higher interest rates than a normal home loan, and lenders require larger deposits. Lenders impose loan-to-value ratio (LVR) caps, meaning you can borrow up to a certain percentage of a property's value, often no more than 80%.
Lenders typically require a minimum of two years of self-employment history and evidence of consistent income. While documentation requirements are less stringent than traditional loans, you still need to provide proof of income.
Tip: The key is to demonstrate that you have consistent income, your business is growing, and there is a clear long-term trend of increased earnings.
Let’s take a look at what documents you need to provide.
Documentation to prove your income is more flexible than a standard home loan, and can come from a variety of sources, including:
You would also need to provide identity documents and an outline of your expenses, assets and liabilities. The lender will also perform a valuation on your property.
If you are unable to provide the above documentation, or have only been self-employed for a short period of time you may still be able to obtain a loan. Unsure if you qualify? Get in touch with one of our loan experts to discuss your circumstances.
A low-doc loan is flexible enough to be used to:
Let’s now look at what you can expect when you apply for a loan with us.
There are four steps in our application process:
Apply online using our easy application process, or book a meeting or chat with us online!
A friendly Loan Consultant will discuss your needs and find the best solution.
Submit necessary documents, such as accountant letters, BAS statements, or bank statements.
We'll also conduct a property valuation during this step.
Our credit team will review your information and make a decision on your application.
Our solicitors will send you the loan contract via email.
We'll coordinate with your solicitor or current lender for settlement.
Have any questions about low-doc home loans - or anything else? Our team is available to chat at a time that suits your schedule.
Most lenders require you to demonstrate at least two years of self-employment for a low-doc loan. As a non-bank lender, Yard can take a more flexible approach to income verification. For example, your application will be considered if you've been trading under an ABN for at least six months and can demonstrate consistent income growth.
Yes, sole traders can qualify for a home loan. Low-doc or alt-doc home loans are specifically designed for self-employed individuals who may not have traditional income verification like payslips. Instead, you’ll need to provide alternative documentation to us, like an accountant's letter, business activity statements (BAS), or bank statements to evidence your income.
Low doc home loans tend to have slightly higher interest rates than standard home loans, but are still competitive. You may also be able to transfer to a standard low rate loan after you have completed your next tax return, and we have reviewed your situation. Speak to our home loan specialists, so we can check your eligibility and assist with your application.
Self-employed individuals, including business owners, sole traders, contractors or freelancers, can still qualify for a home loan. Low-doc home loans are specifically designed for people who do not meet the traditional income verification requirements. Yard takes your unique situation into account, with a more personalised and flexible approach to the loan approval process.This includes verifying your income via alternative means, including assessing business activity statements (BAS), an accountant declaration and bank statements.
New loan inquiries: hello@yard.com.au
Service requests: help@yard.com.au
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