Select document template from lookup dropdown or upload

I currently have a lookup field from a document library where we store template documents. The user chooses from the dropdown which document template the record requires. If the template document isn’t in the document library, Id like to have the ability to allow the user to upload a new document template to this document library and have that set as the related document on the record. Is that possible?

Dear @Jaydius,
How do you see it work? Currently, the only option to upload a file from a form to another document library is via List or Library control, do you want this to be an option in the lookup field?

We might be able to offer paid support to add this feature, but it’s not available right now. It’s possible to add items from the Lookup field, if Doc template was an item attachment, for example, this could work, but this complicates things further.