The low doc home loans represent the perfect option for self employed persons. The greatest majority of high street lenders will ask for a steady income proof in order to offer almost any type of loan. Now, if you run your own business being self employed, making such a proof of income is very difficult. This is why you should look for low doc home loans. When you apply for a low doc loan, you will not have to provide as many documents as when you are applying for a regular loan.
An important prerequisite to success is to research well and find a lender by offering truly advantageous terms and conditions. Competition is extremely tough, and many lenders will advertise ‘low doc’ loans just to attract more clients; in fact, they do not even offer low doc loans, but regular loans. Pay attention to the main description/offer of the lender and get several free quotes and comparison shop.
What to look for in a non conforming home loans specialist
When looking for a specialist lender in non conforming home loans, you will need to provide a few documents. These include your registered business name proof, a signed Borrower’s Income Application, Business Activity Statements for the past 1 year and your ABN. It is extremely important to mention that low doc loans carry about the same features as a full doc loan. There ere no major differences; there are only certain providers who specialise in offering low doc loans for self employed people.
Those with a bad credit rating, will access loans on more expensive terms- high interest rates, low LTV and shorter repayment terms. Those with a good credit rating will be eligible for more flexible terms and conditions such as low interest rates, higher loan amounts and reasonable repayment terms. Of course, it is imperative that you first try to repair your credit rating and apply after that to access higher value loans. For more information about low doc loans visit this site to learn.
There are both variable and fixed rate low doc loans available. It depends on your personal choice which one you will select . A fixed rate loan is suitable mostly to people who have a sort of a predictable, steady monthly income. If you don’t know which exact type of loan to choose, you should ask a financial expert to explain all these details to you. This way, you will make a well informed decision.
What are some general restrictions regarding low doc loans from specialist lenders?
The restrictions differ when seeking a low doc loans specialist lender when compared to other lenders. However, some general restrictions that might apply include:
- You cannot borrow more than 80% of the real make value of your home. A low doc loan is secured, and you will offer as collateral your property. In most cases, after a proper evaluation, the lender will not offer a loan higher than 80% of its real value. People with bad credit rating will get access to loans with much lower LTV, such as only 65% or maximum 70% of the real market value of their property.
- Loans that reach up to 80% of the value need to be taken out with mortgage insurance to lower the risk on the side of the lender. For lower value loans you do not need to take out insurance.
- You are generally not allowed to switch to other types of loans during the first 2 or 3 years of your loan. You can only opt to switch to other low doc loans.
To learn more about low doc loans and other financial advice, ensure you speak to The Financial Professionals.