In a bid to cater to the growing needs of the self-employed sector, Adelaide Bank has launched a new low doc mortgage.
The product, Smartdoc Plus, is said to be a solution based loan that allows self-employed people to purchase residential property, refinance an existing lo doc loan and consolidate their personal lending into one simple account.
According to the bank’s general manager of thirds party lending Damian Percy, the new product will be available for loans up to 70 per cent LVR and requires the borrower’s accountant to complete a simple income declaration.
“Low doc loans were introduced into the Australian mortgage market in the late 1990’s and Adelaide Bank was an innovator in the low doc market, adopting the product early and carving a niche among mortgage managers and brokers as a specialist in the field,” Mr Percy said.
“At the peak of its popularity in early June 2007, the low doc market was estimated at $38 billion, and Adelaide Bank held 12.3 per cent of the market with a $4.7 billion portfolio.
“However, the Global Financial Crisis unfairly tarnished the image of this product in Australia, but Adelaide Bank remains confident low doc loans have a place within the local mortgage market.”
Mr Percy said Adelaide Bank identified the needs of small and medium business owners were not being met and that a genuine need for lo doc loans existed.
“Our intention is to provide a non-insured option for genuine self-employed borrowers who are yet to complete their financials. In our view, a simple accountant’s declaration represents a practical and efficient way to establish income in such circumstances, without requiring introducers to wade through reams of documents and become accountants themselves.”
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