A low doc home loan, more accurately alt doc, is a loan for self-employed borrowers whose tax returns aren't ready or don't tell the current story.
A low doc home loan, more accurately alt doc, is a loan for self-employed borrowers whose tax returns aren't ready or don't tell the current story. Instead of full financials, lenders assess alternative evidence: BAS, business bank statements, or an accountant's declaration.
Legitimate, useful, priced differently, and best used deliberately.
Part of the employment and income home loans guide.
Instead of two years of returns: some combination of lodged BAS, commonly six to twelve months, business bank statements showing turnover, and a signed declaration of income, often supported by an accountant's letter.
Confirm your numbers.
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Alt doc pricing sits above full-doc, and maximum loan-to-value ratios are usually lower, expect a larger deposit requirement and sometimes risk fees at higher ratios. That is the market pricing less verification.
The strategy that works: use alt doc to move when moving matters, keep the file clean, and refinance toward full-doc pricing once the returns catch up, the exit is planned on day one, exactly as with specialist credit lending.
BAS that don't reconcile with bank statements. Declarations that outrun what the evidence supports, lenders test plausibility, and an aggressive number invites decline. GST registration too young for the policy. This is matching work, not form-filling.
And using alt doc when a good full-doc lender would have read the real financials better, which costs pricing for no reason.
Yes. The old no-doc products are gone; modern alt doc lending still verifies income, just through alternative evidence like BAS, bank statements and declarations. Responsible lending obligations apply exactly as they do elsewhere.
Generally more than full-doc, maximum loan-to-value ratios commonly sit around 80% and sometimes lower, with pricing steps along the way. Policies differ by lender and the strength of the evidence.
Usually, yes. The premium varies by lender and ratio, and the sensible plan treats alt doc as a bridge: clean conduct, returns lodged, then a refinance review toward full-doc pricing.
With many alt doc lenders, yes, commonly six to twelve months of lodged BAS, often alongside bank statements or an accountant’s letter. Which combination, and how income is calculated from it, differs by lender, run your numbers through our self-employed income calculator first.
No, not a well-placed application, and refinancing back to a full-doc loan later is normal. What hurts is scattergun applications, so the same enquiry discipline applies here.
Full doc with add-backs, or alt doc on BAS and statements, the right answer depends on your actual numbers. Charles compares both before anything is lodged.
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General information only, not credit or financial advice. Alt doc evidence requirements, LVR limits and pricing vary by lender and change over time; all lending is subject to individual assessment and approval.
