If you’re self-employed or a small business owner and don’t have the required documents for a standard home loan application, then you may have heard about low doc and alt doc home loans.
What is a Low Doc home loan?
The term low documentation (or Low-Doc) home loan can mean something different depending on the lender you’re dealing with. This term was commonly used before the 2008 Global Financial Crisis (GFC) to refer to a mortgage that required less information than ‘standard’ a home loan to demonstrate ability to repay the loan. After the GFC, the National Consumer Credit Protection legislation was introduced and identified that Low Doc Loans didn’t meet these lending requirements, and ceased being offered to consumers.
What is an Alt Doc Home Loan?
The definition of Alt Doc home loans can again vary lender to lender, but at Pepper Money, we refer to these as loans that accept alternative documentation to what would be considered for a ‘standard’ home loan.
Alt Doc home loans still require supporting documentation and go through our full credit assessment criteria, however the documentation we ask for caters to a wider variety of financial circumstances and complies with today’s lending standards. Alt Doc loans are a solution for Australia’s army of self-employed workers who may not tick the usual loan application boxes or might not have the extensive ABN history and paperwork required by some mainstream lenders
What do I need for an Alt Doc home loan?
We consider a range of financial documentation for our Alt Doc home loans:
- 6 months of ABN registration and 6 months of GST registration
- Declaration of financial position, and one of the following:
- 6 months business bank statements
- 6 months BAS
- Accountant’s letter
Try our Home Loan Repayment Calculator
See what a Pepper Money home loan might look like for you.
This repayment calculator gives you an estimate of what your home loan repayments could be, based on information you have provided in the calculator. The calculator does not take into account loan establishment or application fees, nor government statutory or lender fees. It is to be used as a guide only and does not constitute a quote, pre-qualification, approval for credit or an offer for credit and you should not enter commitments based on it.
Our real-life guides are here to help
Here are some handy tips and guides about low doc and alt doc home loans.