Low Doc Home Loans – Star Ratings
IN THIS REPORT
Being self-employed or a contract worker gives you a certain amount of freedom but with it comes a unique frustration: proof of income when you want to buy a home. In the past the banks were not an option for a loan unless you could tick all the maximum assets, minimum liabilities, stable long-term income boxes.
Luckily for Australia′s 1.2 million sole traders, mortgage brokers led the way with the introduction of low-doc loans. These non-bank lenders changed how self-employed borrowers were viewed in that they looked at a borrower′s overall ability to service a loan, rather than simply ticking off a documentation checklist.
With such a sizeable market to service, low-doc loans thrived and competition was strong. CANSTAR rated this financial sector to help guide potential borrowers towards a five-star product that would meet their needs.
Then in 2008, the global financial crisis hit. Lending in general was paralysed and low-doc loans all but dried up. CANSTAR decided it was prudent to suspend all ratings of low-doc products. After years of turbulence, ASIC now reports that lenders are continuing to take a responsible approach post-GFC, particularly with low-doc loans. The demand is still there and the sector is thriving once again.
It is now time to restart our annual comparison of low-doc loans, and our 2015 rating compares 59 loans from 18 lenders.
We hope you find this star-ratings report helpful in your quest to compare loans and lenders.