Types of self-certified loans:

Generally there are 3 types of lo-doc loans, these are self-declared income loans, accountant letter / account statement loans, and asset lend loans.

 (1)   Self declared income:

Self-declared income refers to the borrower signing a declaration / certification stating their annual income. It is the most common type of self-certified loan. The lender will assess your application based on the strength of that declaration, in addition to a review of your assets and liabilities.

(2)   Accountant letter of Account Statement:

An accountant letter or an account statement is a more stringent type of criteria. Given the additional supporting documentation, this may create less risk for the lender, and result in a lower interest rate being applied. In addition to the self declaration, some lenders may request an accountants letter for further verification, particular if the applicant has been self employed for a short period of time.

(3)   Asset lend:

Asset lend is the most lenient type of lo-doc loan. In this situation, the lender does not require a self-declaration or an accountants letter to verify your current or historical income or assets that you owe. Asset lend means the lender will determine your application solely on the merits of the  property you are purchasing (the security of the loan). It is important to note in this type of situation, the lender may give you less than 80% of the value of the property, so as to minimize the risk to them, or may apply a higher interest rate to account for this risk.

An overview of self-certified loans:

• Overall less documentation is required

• Self-certification rather than the traditional evidence of income

• Most lenders will only lend you a maximum of 80% of the value of the property (if you need to borrow more than 80% of the property value, some lenders may permit this, depending on your personal and financial circumstances. GN Finance can help you source various options and lenders)

• Likely you will need to take out lender's mortgage insurance when borrowing up between 60% to 80% of the value of the property

• Self-certified interest rates are likely to be 0.5% to 2% higher than the standard variable interest rate in the market. There may be some opportunity to receive a discounted rate over a certain period of time, or if you are able to provide tax returns in the

GN Finance can work with you to determine the most appropriate home loan or commercial loan for your personal circumstances, and the most effective structure to make repayments