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Documents for a low doc home loan, including your BAS statement home loan paperwork
Self employed? A BAS statement home loan lets you verify income with your BAS and other records. See the documents for a low doc home loan you may need.
If you run your own business, a BAS statement home loan is one way lenders can read your income without the usual two years of full tax returns. Low documentation, or low doc, lending lets self employed borrowers verify income with alternative records, and a Business Activity Statement (BAS) is often central to that. This guide explains the documents for a low doc home loan, how a BAS for home loan assessment usually works, and what else a lender may ask for. It is general information only, not personal advice, and what you may qualify for depends on your circumstances and each lender’s criteria.
A low doc loan is not a no document loan. You still prove your income, you just do it with a different set of records. Knowing the documents low doc home loan lenders accept before you apply tends to make the process smoother.
What a low doc home loan is
A low doc home loan is designed for self employed people who cannot easily show their income with payslips. Instead of an employer wage, you earn through your own business, so a lender reads your income from business records. The label covers sole traders, partners in a partnership, and people who own and work in their own company.
Low doc does not mean a lender skips checking your ability to repay. Lenders still assess whether your income is steady, likely to continue, and enough to cover repayments alongside your other commitments. The difference is the paperwork you use to show it.
Why your BAS matters for a BAS statement home loan
A BAS is a statement self employed people lodge to the Australian Taxation Office (ATO) to report tax obligations such as goods and services tax (GST). Because a BAS is lodged regularly through the year, it gives a lender a recent view of how a business is trading, which is why a BAS for home loan assessment can carry weight in low doc lending.
A lender may use recent BAS lodgements to cross check the income you have declared. Where a full tax return shows a full year in arrears, your latest BAS shows more current activity. That is why a BAS statement home loan can suit a borrower whose recent trading is stronger than a year old return suggests. Lenders read these records differently, so two businesses with similar earnings can still be assessed differently.
Documents for a low doc home loan
Exact requirements depend on the lender, but for a low doc application you are commonly asked for a combination of the following. No single list fits every lender, and many will ask for more than one type of proof.
- Recent Business Activity Statements, often the last four quarters
- An accountant’s letter or declaration confirming your income
- Business bank statements showing trading activity
- An Australian Business Number (ABN) and evidence it has been registered for a set period
- GST registration details where the business is registered for GST
- Identification and details of your deposit and savings
- Details of existing debts and ongoing expenses
Some lenders will accept one of these as the main income proof, while others want two or more lined up so the figures support each other. Having your documents low doc home loan paperwork ready before you apply helps a lender assess you quickly. For the full standard application list, see our Documents needed home loan application guide.
| Approach | How you prove income | Who it tends to suit |
|---|---|---|
| Low doc | Recent BAS lodgements, an accountant’s declaration and business bank statements, rather than full tax returns. | Self employed borrowers whose recent trading is easier to show than a full year return. |
| Full doc | Two years of personal and business tax returns with the matching notices of assessment. | Borrowers with steady, well documented income across a couple of years. |
How a lender assesses a low doc application
Lenders want to see that your income is real, stable and enough to service the loan. For a low doc borrower, that picture is built from your business records rather than payslips. A few things tend to shape the outcome.
- Length of time in business, since a longer trading history gives a lender more to assess
- Whether income is rising, flat or falling across the periods reviewed
- How much profit is left after expenses, because lenders generally assess income after costs, not turnover
- Other debts, such as a car loan, credit cards or a business overdraft
Your credit history is part of the picture too. A credit report is a record of your credit history that lenders use to decide whether to grant a loan, and it includes your repayment history, any defaults, financial hardship arrangements and credit applications. You have a right to get a copy of your credit report for free every 3 months, so it is worth checking yours is accurate before you apply.
The deposit and lenders mortgage insurance
The deposit rules are the same whether you go low doc or full doc. A common savings goal for a house deposit is 20% of the purchase price, plus enough to cover buying costs. A deposit of 20% or more also helps you avoid lenders mortgage insurance (LMI).
Lenders mortgage insurance is a one off fee that protects the lender if you cannot repay the loan. It does not protect you or your guarantor. You may need to pay it when your loan to value ratio (LVR) is above 80%, which is another way of saying your deposit is under 20%. Loan to value ratio is the size of your loan compared with the property value. For example, if you borrow 450,000 dollars to buy a 600,000 dollar home, your LVR is 75%. The lower your LVR, the lower your costs and the better your chance of loan approval.
Some lenders set a lower maximum LVR for low doc loans, so a larger deposit can matter more than it would on a full doc loan. It is worth working out what your deposit covers before you apply, since a deposit under 20% may mean paying LMI.
Low doc borrowers should know that some lenders set a lower maximum LVR for low doc loans, so a larger deposit can matter more. First home buyers may also be able to use the government 5% Deposit Scheme to buy with as little as a 5% deposit without paying LMI, because the government guarantees part of the loan, subject to the scheme’s eligibility rules. Our What is lenders mortgage insurance guide explains LMI in more detail.
To see how your deposit changes what you may be able to borrow, you can try the borrowing power calculator before you start house hunting.
Try the borrowing power calculator
Open the calculator to run your own numbers.
Steps to get ready for a low doc home loan
Getting your records in order is the single biggest thing you can do to make a low doc application run smoothly.
1 Gather your BAS
2 Ask your accountant
3 Line up business records
4 Check your credit report
5 Build your deposit
6 Compare and apply
How a broker can help with a low doc loan
A low doc borrower usually has a more involved income story, so a broker can help. A mortgage broker deals with lenders to arrange a home loan, works out how much you may be able to borrow, presents options and can manage the application through to settlement. Because lenders treat low doc income differently, a broker can match you to a lender whose criteria suit your records, whether that is a BAS led assessment or an accountant’s declaration. Our Self employed first home buyer guide and our First home buyer casual income guide cover related income situations. You can also see the full range of options on our home loans page.
Talk to the team at Finance Lab
If you are self employed and not sure how your income will be assessed, the team at Finance Lab can talk through your situation, explain which documents for a low doc home loan you may need, and help you compare options across lenders.
Talk it through with the team at Finance Lab
A Finance Lab broker can look at how your business income will be assessed, which records you may need and how your options compare across lenders. No cost to chat, no obligation to proceed.