Low doc home loans
Low doc loans are designed for self-employed borrowers, those who have no proof
of income or less documentation to prove their employment history and ability to
service a loan. Low doc loans are slightly more expensive than traditional loans
due to the higher risk profile of the .
Advantages of Low doc home loans
- Less paperwork and less fuss
- Flexible for those with no proof of income and savings
- May be able to apply for lower interest rates down the track if able to provide
tax returns at a later date
Considerations - Low doc home loans
- A higher deposit is usually required.
- Higher fees, charges and interest rates
- Extra security may be required, eg – a car or other investments.
- Some loans require the applicant to refinance after a set period of time.
- Some lenders may require borrowers take out lenders mortgage insurance
- Requires a clean credit history
Low doc home loans are suitable for
Those who have difficulty providing the standard documentation to verify their income,
and savings, particularly the self employed, contract workers, seasonal workers
or those who are new to the country.
Examples of Low doc home loans
- Liberty Financial won the non-bank category for Best Australian Low-Doc
Home Loan in the 2007 Your Mortgage ‘Mortgage of the Year’ Awards, with
their ‘Nova Home Loan 3-year Fixed’ product.
- Westpac won the bank category for Best Australian Low-Doc Home Loan
in the 2007 Your Mortgage ‘Mortgage of the Year’ Awards, with their ‘PAP Rocket
Repay >=$250k’ product.