Low Doc Home Loan Remortgage
The COVID-19 pandemic has put many Australian homeowners into financial situations where they now have to refinance their houses. Refinancing or remortgaging your current home loan can be difficult, especially if the original loan is a low doc loan. It is possible to refinance a low doc loan, but it can be challenging.
Are you eligible?
Even though lending criteria are different with each lender, there are some standard guidelines. Typically, you are eligible to refinance your low doc loan if the following apply:
- You are borrowing less than 80% of your property’s value.
- You have a clear credit history and minimal debt.
- You have paid your monthly repayments on time and consistently over the last six months.
- If you want to release some of your home’s equity, you must provide a valid reason and proof of your loan’s purpose.
- To verify your income, you will need to provide a certified letter from your accountant or your business’s bank statements.
What can I use the loan for?
If you are approved for a low doc refinance, you can use the loans for the following:
- you can release equity to purchase a new home or investment property, or you can invest in shares of a business.
- A few lenders may allow you to consolidate your debts, but this needs to be discussed with your lender.
Low doc remortgages are considered high-risk, and therefore, they have stricter guidelines for how you can use funds freed up. If you are thinking about refinancing your home, discussing your situation with a mortgage broker is essential. Mortgage House and our team of brokers can help determine if refinancing is right for you. If it is not, we have other financial options available. Contact us today.