FAQs

A specialist loan (also known as a non-conforming loan) is an alternative to a mainstream application and can offer different methods of income verification and policy requirements by the lenders. This might be a good option for you particularly if you have bad credit history or are unable to provide traditional documentation, stopping you from getting your loan approved by the more traditional banks. Specialist loans are used as a stepping stone to obtain finance in the interim until you meet the requirements for a Tier 1/traditional lender.

Low doc loans or specialist loans are usually offered by non-bank lenders outside of the major financial institutions.  We have around 10 (and growing) lenders on our panel that offer specialist loans, so we have choice and some negotiating power.

Specialist loans are great for when:

• Your finances are not quite ready at the time of application.
• You’re self-employed.
• You have a credit impairment that traditional banks will use to prevent you from borrowing.
• You have a high income but have profitability of your income to reduce your taxes.

• Keep an open and positive mindset. There are a multitude of specialist loan options out there, so stay positive.  If it is not possible right now, it will be soon if you follow the plan.

• Concentrate on whether you can make the monthly repayments instead of the interest rate.
• Show your ability to save and manage your finances before and after your loan.
• Get a supportive accountant to confirm your income declaration.
• Explain your situation clearly so this can be relayed to the bank in order to increase your chances of getting your loan approved.

Credit impairments refer to:

• Missed loan repayments 
• Defaults on bills including phone bills, utility bills etc.
• Bankruptcy filings

We can find this out for you through a Credit Score Check Report which we conduct for clients who are self-employed.

Specialist loans can be used just like regular loans. Examples include:

• Buying a home or investment property
• Completing renovations
• Investing in shares
• Buying a vehicle
• Consolidating loans to make more manageable repayments

• Most recent 6 -12 months of business activity statements
• Most recent 6-12 months business transaction account history
• Self-declared income declarations
• Account-declared Income Verification

An Income Declaration is a method for the banks to verify your income when applying for a low doc loan and you are self-declaring your income.

Typically, the lender will ask you to state your name, your business’s name, your business’s ABN, the amount you are borrowing and the indicative repayments. At the bottom of the form is usually a declaration confirming that you believe that the income you are stating is true and that you can afford to make the loan repayments. We will assist you with your income declaration.

This is a separate document from your accountant that confirms your Income self-declaration. This will correlate with the income you have declared to confirm you can afford the loan. The letter will state the number of years they have been your accountant, their professional membership and that there are no conflicts of interest.  We will assist you with this process also.

Rates for specialist loans may be slightly higher than full doc loans but usually only by a relatively small margin depending on the reason of the loan, for example, if this is for an owner-occupier home loan as opposed to an investment loan. Other factors include the loan to value ratio (LVR), degree of credit impairment as well as the level of risk to the lender which would all increase the interest rate.

Low doc lenders may charge a fee that is higher than mainstream banks. The fee charged is typically 1-1.5% of the loan and is known as a ‘risk fee’.  Some lenders allow this to be added on to the loan so it is not charged out of pocket to the borrower.

There are certain lenders who will call you to check you understand the terms and conditions of your loan application and confirm your details are indeed correct.

No, you’re not stuck with a specialist loan providing you show good conduct on your loan, your credit file has been rectified and you meet the income required to repay the loan under full doc conditions. If you successfully demonstrate these requirements you can refinance for a full doc loan through a mainstream bank. Of course, we would be with you every step of the way and would assist you to refinance when it is possible and feasible.

There are 2 main restrictions when it comes to specialist loans:

1. Low Loan to Value Ratios (LVR) only. You must have at least a 20% deposit on your loan ready to go as these are considered risky investments by your lender. Any loan that is more than 80% of the purchase price will not be considered.
2. The purpose of the loan. You cannot use these loans for construction and you cannot purchase vacant land. Restrictions surrounding postcodes may apply meaning you may be limited to purchasing within metropolitan areas.