Low Documentation Loans
Low doc loans are designed to assist people who do not qualify for a traditional home loan to buy a property. Low doc (or low documentation) loans still require the application to be made in writing, however, you may not be required to provide much of the paperwork that is necessary with standard home loans, such as proof of income, assets or liabilities. The low doc loan relies more on a method called self-verification, where you state your income without the verifying documentation.
Who can benefit from a low doc loan?
Low doc loans are designed to benefit those people who have some existing equity or a deposit saved, and have trouble showing evidence of regular income. This could apply to the self-employed or casual workers. Low doc loans could also be made available to people with a bad credit history.
Why should I take out a low doc loan?
If you fall into any of the categories above, and wish to purchase a property, a low doc loan could be a viable option for obtaining finance. As with any major financial decision, always weigh up the pros and cons and determine whether you can afford the repayments.
Most low doc loans will cover up to 80% of the value of the property (80% LVR) although the more financial documentation you can present to the lender, the higher the percentage could be.
