Low doc loans provide self-employed borrowers with the finance they need to make their dreams of home ownership a reality.
Unlike traditional mortgages, low doc home loans don’t require the same amount of paperwork at the time of application. In addition to being asked to self-certify their income, low doc home loan borrowers may be asked to provide an accountant’s letter as proof of their self-declaration.
What is an accountant’s letter?
Like bank statements and business activity statements (BAS), accountant’s letters are a way for self-employed borrowers to support their claims regarding income.
As its name implies, an accountant’s letter is a document signed off on by a fully qualified accountant. The accountant is confirming that a borrower’s self-declared income is both honest and accurate.
Some lenders will accept an accountant’s letter as an alternative to bank statements or a BAS, but borrowers should keep in mind that these letters are only valid for a certain amount of days. The accountant’s letter attests to a borrowers financial standing at that point in time, so if too much time passes, a lender may no longer feel comfortable approving an application.
Not just any letter sporting a signature will do. Lenders will want the accountant to either use their own personal letterhead or fill out specific forms intended for accountants to use. The accounting professional must also provide their own identifying information, including an ABN, address and phone number.
Accountants will also be asked to disclose how long they have worked on behalf of the borrower, and may be required to provide information relating to taxable income.
If you’re in the market for a low doc home loan, or simply wish to discuss your options with a professional, contact the specialists at Redrock.