A "Lo Doc" or sometimes call "Lo Doc Home loan" are mortgage or
home loans where documentation for verification of your income
is not required. However, all other documentation is.
These loans are ideally suited to self-employed, independent
contractors, investors, credit rating impaired, ex-bankrupt or
clients with arrears on current mortgages and borrowers who have
been rejected by traditional lenders. Including people with
suitable incomes but to meet bank verification takes valuable
times and money.
Low Doc Home Loans (Low Document) are usually slightly more
expensive than traditional loans due to the higher risk profile.
This is primarily for people who are looking to purchase
investment properties, residential or refinance existing housing
property and don't have PAYG or current taxation returns
confirming their income, which normally sustains a standard
investment loan.
There are 3 main types of Low Doc or No Document Loans.
No Ratio Loans These loans are for lenders who may not wish to
disclose their incomes, Thus there is no debt to income ratios
for the lender to consider. Good credit and abundant assets the
No Ratio borrower has makes up for the lender not considering
the borrower's income information. If gathering income
documentation's is going to be a logistical nightmare, then this
loan can offer a quick and easy process.
No Doc Loans To get credit the No Doc loans requires the least
amount of documentation. The lender evaluates your loan request
with the minimal amount of financial information from the lender
and maximum privacy is assured.
Stated-Income (Low Doc) Loans If your income fluctuates week to
week, month to month, the Stated-Income, or Low Doc loans are
the most attractive. However unlike the No Doc Loans, the Low
Doc Loan does require the lender to disclose earnings, usually
for two years, and might need to show tax returns and bank
statements.
If you think a No Doc or Low Doc loan is right for your
situation, talk to a mortgage expert. It might be beneficial for
you to pay a higher rate for this loan. A good mortgage banker
can also show you how to obtain the necessary documentation.
About the author:
Steve Szasz is the Webmaster and CEO of Finance Unlimited. His
website can be found at
Finance Unlimited
