Low Doc Mortgages

Low Doc Mortgages

As a self employed worker, you may not have the amount of paperwork that's normally required to apply for a home loan.  If this if the case for you, then low doc home loans can be the ideal solution.

Low doc or no doc loans are specially designed to help self-employed people turn their property dreams into a reality. With this loan there is less of the hassle if you applied for a 'regular' loan and can also help the self employed borrower manage their finances.

A low-doc loan still requires some evidence of income such as back statements or tax returns etc, while a no-doc home loan works by self certification.  A statement signed by you declaring your income is accepted by the lender.  Mortgage brokers will be able to help explain the process further.  Borrowers applying for a low-doc or no-doc home loan will need to have a clean credit history.

Low-doc home loans present more risk for the lender, therefore the risk is usually built in to the mortgage at cost to the borrower.  The loan can be a fixed rate or variable rate mortgage, and can be used to borrow, up to 80% of the property.   The lender will factor in the extra risk by using a higher interest rate, or charging lenders insurance. However, self-employed borrowers, seasonal workers, as well as customers with no proof of income, who struggle to gain approval for the usual loan types can benefit from these loans that require less documentation or in some case, no documentation of your income.  The loan itself operates the same way, but you are able to gain approval without as much documentation. 


Advantages
Low-doc and no-doc home loans offer a reasonable and fair home loan alternative for these people who for whatever reason cannot disclose their income in full.  If you have saved a deposit, you can usually negotiate a lower rate or ask the lender to waive some of the fees such as lenders mortgage insurance.

Considerations
While these loans are fantastic for some borrowers, the higher mortgage rates usually applied to these loans can blow your budget so it is important to do your research before committing to any loan.  There may be other fees involved for a low-doc loan, although the more documentation you can provide, the less these will be.  While you do not need to provide proof of income, most lenders will require a clean credit history.  Often, low doc home loans will have a shorter term period, some as short as a year, which means that the lender will require you to refinance at the end of the term.


To talk to a local mortgage broker about low doc home loans, call us on .  Or you can submit your details on line:

 

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