Low Doc Home Loans are designed for borrowers who don’t have the standard documents to qualify for a traditional bank loan. For instance, if you are a seasonal worker or have casual employment, a low documentation loan would be more suited to you. A low documentation loan works the same as a standard loan – with a few minor exceptions. These are harder to find in the mainstream market but there are specialist lenders available. There are also differences in interest rates and eligibility.
So, how do low documentation home loans work and are they for you?
Understanding the Ins and Outs of a Low Doc Loan
A low documentation loan was originally built for those who were self-employed and didn’t meet the standards set by lenders. Today, they’re still the same but are open to a slightly wider field of borrowers. Low documentation loans work similarly to standard loans; you have terms and conditions to meet, along with rules to follow. To learn more about low documentation loans, check out www.lowdocloansco.com.au
What Paperwork is Required for a Low Doc Loan?
There is a misconception that Low Doc Home Loans require minimal paperwork for borrowers to get approval; however, that’s not entirely true. While the type of documents required are different, extensive paperwork is still required. For instance, you will need to show GST registration, your ABN, any bank statements related to your business, and more. Some lenders will also require an income declaration form.
Are Low Documentation Home Loans Good to Try?
Let’s be honest, getting on the property ladder is incredibly difficult at the best of times. When you don’t qualify for standard mortgage loans, the task becomes much more difficult. It means you have to find a loan that works best for you and your current situation. A low doc loan can provide a great alternative to many borrowers. You can get a loan that allows you to buy your dream property.
Be Prepared for High-Interest Rates
While every loan comes with interest rates, some are higher than others. Low Doc Home Loans typically command higher rates. The reason for this is down to the lender’s risk. Remember, you – as a borrower – don’t meet the criteria of a standard loan which throws up a red flag. It means there is a greater risk to the lender and that’s one reason to increase interest rates. This doesn’t mean all loans are expensive or out of reach. With some careful research, you can find a loan that is affordable and reasonable.
A Simple Way to Get on the Property Ladder
Not qualifying for a traditional loan can be incredibly frustrating because it’s a setback, but it doesn’t spell the end of the world just yet. Low documentation loans are great alternatives to consider. They work similar to a traditional mortgage loan but the paperwork required is different. You have to show ABN, bank statements, and more. Low doc home loans are viable and can offer a great alternative to traditional mortgage loans