If you are looking for a loan for your rural property but you are not exactly keen on being buried with mountains of documentation, lo doc farm loans are your best friend.

Let’s break it down.

Lo Doc loans

What is it? Also known as a “low-documentation loan,” it’s a loan that requires less documentation than other similar loans.

Lo Doc farm loans cater to small businesses and self-employed people who do not have access to all the financial documents usually required to apply for a farm loan.

Characteristics

Higher interest rates are connected to the Lo Doc farm loans, as lenders usually identify them as high-risk loans.

The size of the land you are planning to purchase will be a significant factor in your application. Banks tend to be very conservative in their lending with larger properties under Home Loan lending, but are more flexible in Commercial Lending.

Requirements

Different lenders have different requirements for Lo Doc farm loans, and it can be overwhelming sometimes to be faced with such a variety of options. The usual requirements are:

-clear credit history

-good repayment history for old or existing loans

-ABN-Australian Business Number

-BAS statements to evidence your income

Other requirements may be the percentage of the value of the property you are looking to borrow on, whether you are registered for GST, your credit scoring and the quality of your security property.

If the above is not available or your credit history isn’t clear, there are still options for private funding or non-conforming lending.

Property assessment

The lenders usually want to assess the property you’re looking to buy. They pay attention to:

-purpose – the property should ideally be for investment or personal goals

-zoning – a lender is likely to consider properties zoned for farm-use, commercial use or industrial use as ‘commercial.’

-property size – the land size usually makes the difference between lending under a Home Loan or under Commercial Lending

-access – dirt roads are okay if they are maintained well

-location – many lenders have restrictions on postcodes, while some have no location restrictions at all

-services – is the land within the distance of an electrical grid?

Do you qualify for the Lo Doc rural farm loan?

As we previously stated, different lenders have very different requirements. Many of them offer flexible farm loan terms if you can demonstrate you are capable of making repayments.

This means that you have plenty of options. But it also means that picking the right lender for your Lo Doc farm loan can become quite a challenge.

We highly recommend that you look for some professional help, and we are here to offer you just that. Our team at AgLend can investigate many different lenders to find one that is right for you.

Talk to us at AgLend to find out more about how to get a low doc loan on a rural property.