Brokerage Loan Market claims low doc loans – as they exist now – are a dying breed due to banks tightening their lending policies in the wake of the GFC.
Loan Market broker Hannah Nguyen said it was now very difficult to get low docs over the line.
“In the past, if you had an ABN number registered over two years and a good deposit of 20% you would get the loan easily by completing a self-certified income declaration,” she said.
“However, this is a thing of the past and now alternative documents such as a 12-month BAS statement, a letter from your accountant confirming your income, or a three month trading statement showing high turnover, are required.”
Her comments echo those by Australian Broker readers, who were very vocal on the subject of low doc loans and their growing irrelevance in the wake of fraud allegations.
“Prior to GFC banks' had a massive appetite for this risk and sought no other form of income confirmation,” said reader Keith Bridges on Australian Broker Online’s reader forum.
“This only become a big deal because change of policy and legislation let's move on as low docs as we used to know them are essentially no longer.”
Have your say: are low doc loans a thing of the past? Comment below!