Nicole AveryGathering the right documentation for your home loan application can be tricky if you’re self-employed. We’re here to help self-employed borrowers and borrowers with non-traditional income get the home loan that’s right for them.
If you’re wondering whether a low-doc or alt doc loan could be the solution, this guide has you covered. Learn about alt doc loans here, which might be right for you and your circumstances and why Bluestone Home Loans is the trusted choice for flexible lending.
How we earn money is changing. Think remote work. Think gig economy. Think online and freelance work. Think multiple income streams.
Traditional lenders and lending criteria can’t always keep up with how quickly the world and how we work is changing, Bluestone Home Loans can and we believe everyone deserves the chance to own a home.
For those with non-traditional income, you could look to alternative documentation home loans (aka alt doc home loans) from non-traditional lenders like us.
First, we’ll go through what an alt doc loan is, and then we’ll let you know what we need in your application.
What’s an alt doc home loan?
Put simply, alt doc loans are for borrowers who may not have all the documentation required for standard (and sometimes rigid and dated) Aussie home loans.
These loans allow applicants to submit alternative forms of documentation to demonstrate their financial stability, fast tracking the loan approval process by offering more flexibility in documentation requirements.
Does any of the following sound like you?
- Your income is seasonal or irregular
- You have been in business for less than two years
- You have income from multiple combined sources such as business earnings, part-time employment, investment income or rental income
- You’ve recently changed careers or from full-time employment to self-employment
If yes, then an alt doc loan may allow you to unlock stepping your foot on the property ladder, or climbing higher.
What does ‘alt doc’ mean?
Alt doc or alternative documentation loans require alternative documentation to validate your income. This is opposed to full-documentation loans for PAYG employees. Each lender that offers alt doc loans will have different requirements.
While of course, you still have to prove your income for an alt doc loan, the process by which you do this is more flexible.
Documents that may be accepted as alt doc verification by your lender include:
- Business bank statements
- Accountant’s letter
- Your ABN
- GST registration
- BAS returns
- Tax returns (if available)
For many sole traders, self-employed individuals and small business owners, the question we often receive is around eligibility for fixed rate loans and refinancing options.
That’s why it’s important to talk with a lending expert before you begin spending time gathering documentation and avoiding common mistakes in your alt doc home loan application.
What types of loans are available for self-employed borrowers?
With the right lending partner, self-employed borrowers can access many of the same loan options as other borrowers, including:
Fixed rate loans: Lock in your interest rate for a set period, offering stability in your repayments.
Variable rate loans: Enjoy the flexibility of interest rates that may fluctuate with market conditions.
Refinancing options: Looking to refinance? Alt doc loans can help you access better rates or terms without needing traditional documentation.
How to nail your alt doc loan application
Successful application for a residential home loan with a non-bank lender like Bluestone Home Loans can be simpler. All loans are still situation and application dependent. You should get prepared and understand the loan products with your broker well in advance of needing finance.
Here are a few tips:
- Check the LVR (loan-to-value) ratio. Loan to value ratio (LVR) is the percentage of the total value of the property that you are borrowing.
- Prepare, prepare, prepare! Get your documentation together beforehand. Less headaches, quicker approvals.
- Do your homework and be thorough to avoid any unexpected fees or add-ons (e.g. LMI (Lender’s Mortgage Insurance) may add tens of thousands to your loan. We don’t charge LMI, but many lenders do).
- Show your financial stability: A good savings history and a clean credit report can support your alt doc loan application.
Everyone’s got a history. But a few factors might support your alt doc loan application. For example, a good savings history and a clean credit report will show that you’re financially responsible, leading you to the best home loans.
Getting started
Could you be ready to apply and not even know it?
When you apply for an alt doc home loan with us, what you’ll need for income verification is just ONE of the following:
- Business bank statement for the last 6 months
- OR BAS returns for the last 6 months
- OR an Accountant’s letter
Our flexible lending solutions cater to your unique financial situation, ensuring you receive the support you need to apply for your alt doc home loan with confidence.
We can help you realise your dream of owning a home with our tailored solutions, even if your circumstances differ from traditional bank standards.
To start the application process, get in touch with your broker and ask them about Bluestone home loans or reach out to our team.