Aaron Whybrow (Diagnostics and Finance) answers whether construction loans can be obtained using alternative documentation (accountant's declarations or business activity statements). He confirms lenders exist who will accept altdoc for construction but warns of slightly higher application fees and interest rates; typically these are used short-term on interest-only terms and can be restructured once tax returns are available.
Can you do a construction loan with just doing an accountant's declaration or showing your business activity statements as you are a business owner? Hey, it's Aaron here. I'm from Diagnostics and Finance and I've been working with a couple of people Right now where we need to get the ability to lend as an opportunity is on the table, whether it's the increase in the market, whether it's an older contract that you've had the ability to access the equity in the land, we need to jump on this opportunity and we don't mind paying a little bit more on the interest rate to be able to get this through or even the application fee. So the answer is yes, I have lenders that will do alternative documentation for construction. Now please bear in mind that yes, there is a slightly higher application fee and there's slightly higher interest rate costs. But typically speaking when we are building a home we are doing this under a interest only term and these lenders typically will be able to once we got the asset, once we cross the financial year border and you've done your new tax returns, we'll be able to restructure it out of that. So it's not for the long term. So I've been working with some clients to be able to construct their home with regards to using alternative documentation and get them the opportunity that they are trying to secure right now, right for their circumstances and right for their wealth journey approach. So if you are looking at an opportunity on the table for your altdoc or alternative documentation, you've had the uplift in the business, you have an opportunity to purchase and build right now or you've had land that's come up for registration off the plan and it's an older contract and you just not totally there with your financials or we want to use things in financial year 2022 before we can get access to the tax returns. Reach out.
