Mortgage advisers working with nonbank lenders can offer New Zealanders a broader range of loan options. These options include low documentation loans (lo doc) for residential and investment property.
These loans are ideal for self-employed borrowers, commission-based contractors or small business operators who may struggle to meet banks’ criteria. They can also be used for refinancing or releasing equity. For more information about the NonBank low doc loans NZ, click here.
No financials required
Many New Zealanders work in the gig economy and as self-employed contractors. They may struggle to meet a bank’s criteria for proving income when looking to buy a property.
That’s where a nonbank low-doc home loan can help. These home loans are designed to make it easier for the self-employed and small business owners to enter the property market. The home loan lender usually accepts profit and loss statements from your accounting software, GST returns and six months of business bank statements.
This is much less paperwork than a complete proof of income mortgage from a bank. It can save you time and hassle and help you to get into the property market sooner. Your mortgage adviser will be able to tell you which specialist lenders offer a genuine low-doc home loan in NZ. They will also be able to show you the available options and interest rates.
No credit checks
As a nation of freelancers, contractors and sole traders, New Zealanders can find it difficult to access mortgage finance when they don’t have traditional payslips or business banking statements. Fortunately, some specialist lenders offer a low documentation home loan (also known as a ‘low doc’ mortgage) for people without this kind of evidence of income. For more information about the NonBank low doc loans NZ, click here.
These loans are outstanding for developers, small-business owners and those who haven’t been trading long enough to provide their bank with financial accounts. They can be used for residential, investment and business property purchases. These loans typically have a higher interest rate than full-doc mortgages, but it’s worth talking to a mortgage adviser to see which lenders are most suitable for you.
Flexible terms
Often, the lenders who offer nonbank low-doc loans are specialist finance companies or mortgage trusts. They can lend up to 80% of the property value and are more flexible on who they will accept as borrowers. Mortgage advisers who regularly do these loans know which lenders are best suited and can help you find the right loan for your needs.
The popularity of low-doc home loans is growing as it’s getting more challenging to get Bank approval. They are also popular with self-employed borrowers and those who work in the gig economy. Many people who work for themselves don’t have the time to provide regular financial accounts to a Bank. This is where the flexibility of a low-doc loan can come in handy. The lender will usually ask for profit and loss statements, copies of GST returns and recent bank statements. They will also require a registered valuation of the property.
Lower interest rates
Some New Zealand nonbank lenders offer interest rates better aligned with a borrower’s deemed risk. For example, a person with a good credit history and a large deposit may pay less than someone with bad credit or who has no warranty and needs a low-doc home loan. For more information about the NonBank low doc loans NZ, click here.
However, these lenders typically require a complete serviceability and credit assessment and a registered property valuation. In addition, they often limit the level of borrowing based on the lender’s comfort that the property will provide the security required to protect their capital.
Mortgage brokers who understand the challenges of the New Zealand mortgage market can find custom solutions for borrowers who need a flexible alternative to traditional home loans. These include those who work in the gig economy, small business owners or commission-based employees. They can also help those with a blemish on their credit history to get back on track. They can even assist with releasing equity for working capital or short-term development funding.