Low Doc Vacant Land Loans
Vacant land loans have increased in the last 8 years. Before the global financial crisis of 2008, many lenders accepted low doc loans for vacant land. However, this began to change in late 2008 as lenders became more choosy with the type of properties they wished to have as security.
When the GFC hit the world economy in 2008, a number of Australian banks were caught with a concentration of risk with vacant land on their own loan portfolios. This meant they had a lot of the same type of exposure in the same /similar field or places. Hence many restricted lending on low doc vacant land to 60% LVR as some considered it a risk.
Do lenders have a minimum time they wish a client to build on vacant land?
Post GFC 2008, some lender still accept low doc vacant land loans conditioned on the intent to construct on this land. In these cases, lenders put a time factor in place to govern how long they will keep this loan on their loan book before requesting the borrower either commence construction on the loan property or find another lender. This is usually between 6 to 12 months from settlement of the original land component loan.
In the case of low doc vacant land loans, there are some lenders who do not take vacant land as security and do not offer a construction loan under a low doc policy either.
Are there any lenders who do not have time restrictions on Low Doc vacant to commence construction?
There are several major institutions who do not have a time restriction, and are also able to do the construction loan. The general construction loan policy would apply in these cases.
Can I get LMI on a low doc vacant land loan?
There are lenders who will lend on vacant land under low doc policy up to 80% LVR, and they will also lend the LMI cost on top. There are also lenders who will not lend more than 60% LVR on vacant land.
Maximum LVR for Low Doc Vacant land loan?
The maximum LVR for a low doc vacant land loan is 80%LVR generally. There is 1 lender in Australia which will also lend you up to 85% LVR for a low doc loan vacant land loan up to $400,000.
Are Low Doc vacant land loans available without showing Business Activity Statements (BAS)?
There are several lenders who will accept low doc vacant land loans without showing BAS but there are some lenders who require the BAS. Please also read low doc with BAS.
Low doc vacant land loan with accountants letter?
You can get a low doc vacant land loan using an accountants letter in support of your income declaration. This method is available with 2 lenders in Australia in 2013. Please also read low doc with accountants letter.
Are Low Doc vacant land loans more expensive?
Not with all lenders. Most lenders who lend on this type of security give the same interest rates as standard residential security.
Generally, more flexible low doc lenders charge a slightly higher rate than some other lenders.
At Mortgage Providers, our consultants have extensive knowledge of low doc policy within many financial institutions. Our consultants can package up a low doc vacant land loan which costs the same as a full doc loan even applying professional package loan discounts. They can even couple this policy without the need to build within a certain period of time.