Category: Low Doc Home Loans

Advantages of a Low Doc Home Loan Explained 

Advantages of a Low Doc Home Loan Explained 

A few years ago, low doc home loans would never be on the table for most people, but times have changed. People are moving away from the traditional 9-to-5 jobs to ones that suit their needs and requirements. As a result, there are more people than ever across Australia that are self-employed or work as a freelancer. It’s an interesting concept because that shines a light on the struggle for affordable mortgage loans.  

So, why do more people look to low document home loans and what advantages do they offer? 

Self-Employed Individuals Often Struggle to Meet Lender Requirements 

One of the most frustrating things for many self-employed people is that they earn a decent living but are turned down for standard loans. It is partly down to their employment status and the fact they’re self-employed. Of course, it doesn’t mean everyone who’s self-employed isn’t eligible for a traditional loan. Some won’t, regardless. It leaves millions frustrated and out in the cold, essentially. That is where a low doc home loan comes into play. 

Low doc home loans are similar to standard loans but are designed for those who are self-employed and don’t meet the requirements of traditional lenders.  

Great Flexibility 

Despite what you might think, a low doc home loan can be a wonderful option to consider. For example, your current employment status stops you from getting a traditional mortgage. However, you can still buy a property with a low documentation loan. If, however, your circumstances changed in three years, you could refinance the loan and get a traditional mortgage. These loans offer great flexibility and are the best to consider today too.  

Good Credit May Reduce Interest Rates 

Typically, low doc home loans would come with an increased interest rate; however, good credit could avoid such things. It is possible to see a reduction in interest rates just by having a good credit score. This, of course, depends on the lender and how much you wish to borrow. In most cases, lenders look at the whole picture before they decide on your loan application. So, if you are a good risk, in the eyes of the lender, you could see a lower interest rate.  

Access to the Market 

A lot of people (who are self-employed) have few options available to them when they want to buy a home. Sometimes, they aren’t eligible for a standard mortgage, and that leaves them out in the cold. Fortunately, a low doc home loan gives them access to the market. It’s a huge advantage and does ensure great flexibility. This is why more choose low doc loans.  

Choose the Best for Your Home Search 

Loans often confuse most, but low documentation loans are some of the simplest you’ll find. What’s more, they can offer a fantastic range of advantages too, including access to the market, flexibility, and good interest rates. You can even compare loans and lenders to find the one that suits you best. Low doc home loans are viable and can provide you with some excellent benefits.  

Self-Employed Borrower: Understanding Low Doc Loans

Self-Employed Borrower: Understanding Low Doc Loans

More self-employed borrowers are looking to low doc home loans than ever before. When you’re self-employed, you face a minefield of high-interest rates, few loans available, and even fewer lenders. It’s a nightmare and it leaves you in a vulnerable state. Fortunately, the market is becoming more competitive, creating a demand for low documentation loans. These loans are quite common today and are aimed at those who’re self-employed. So, what should you know about a low doc home loan?

The Simple Idea of a Low Doc Loan

When you apply for a loan, you would need documentation to verify your income. Unfortunately, when you’re self-employed, the paperwork you have might not meet a lender’s criteria. With a low documentation home loan, that changes. You require minimal paperwork to prove or verify your income. This does make it an ideal choice for those who’re self-employed. Low doc home loans are more simplified and work quite similarly to other traditional loans.

You Might Need a Bigger Deposit

While there might be a few exceptions to this rule, most lenders will require you to have at least a 20% deposit saved when purchasing a home. This can be incredibly important as it reduces the risk to the lender and also shows you have funds to back your application. The more you save, the more positive you’ll be in the lender’s eye. It also helps to have savings beyond the deposit. To find out more, check out

You Will Need to Sign a Declaration

Most lenders will require you to sign an income declaration form. It’s an important document for the lender to have because you’ll list your approximate income and ABN. Lenders can vary, however, so some might require you to list assets on the declaration form. When you’re looking for low doc home loans, most lenders will need an income declaration. It can be a useful way to reassure lenders of your intentions to pay the loan back.

Interest Rates Can Vary

One of the more important aspects of a low doc loan is the interest rates. These rates can vary, considerably, and may depend on your current circumstances and credit history. For instance, if you have an excellent credit score and a clean history of loan payments, it will reflect positively on you. It could keep your interest rates at a reasonable level. On the other hand, if you have a low credit score and have defaulted on previous loans, that might signal higher interest rates. So, it’s important to understand how these rates can vary, especially for each lender.

Take the Loan Seriously

Low documentation loans have changed the market forever. It has given millions the opportunity to obtain a home loan and get on the property ladder. That is why low documentation loans are necessary today. Of course, this is a process that should be taken seriously. You need to approach these loans with a knowledgeable mind so that you fully understand what you’re getting into. Low doc home loans can be an ideal way to get on the property ladder with less hassle.

What You Should Know About Low Doc Home Loans

What You Should Know About Low Doc Home Loans

A low doc home loan can be an excellent solution for those who cannot qualify for a standard home loan. Unfortunately, the main trouble is that you don’t have a ‘traditional’ job. For instance, you’re self-employed; it doesn’t come with traditional payslips, or you run a small business. These can bring in a good monthly income but, of course, the necessary paperwork can be a little trickier. That means traditional lenders might reject your application. Fortunately, low documentation home loans can offer you a way to purchase your home. So, what should you know about these loans?

Interest Rates Will Vary

A low doc loan can be a great solution to consider, unfortunately, the interest rates can vary. Fortunately, most lenders will fix the rate throughout the duration of the loan. That does give you a huge advantage as it means you know exactly what your interest is. Of course, it is important to understand that lenders set the rates according to their loans. It can, however, work in your favour if you have a good credit history and are putting down a lot of money too.

You Need to Have a Large Deposit

One of the more frustrating factors about a low doc loan is that most lenders have a limit on how much they’ll let you borrow. For instance, some lenders will set a limit of 80% of the home’s value. It means you need a bigger deposit of 20%. Compare this to traditional home loans and you could put as little as 5% down. Unfortunately, a low doc loan is not going to allow that – unless you find a very special lender.

Typically, you’re going to need to put down a large deposit to secure the home and loan. That isn’t such a bad thing, however. The more money you put down on the home, the less you have to borrow. It’s ideal and may even help keep the loan’s interest rates pretty reasonable too. So, if you want a low doc home loan, try to save for a bigger deposit. It could help.

You Still Need to Provide Documentation to the Lender

While you have less documentation to provide to the lender, they’ll still want to see certain things. For instance, most lenders will want to look at your business activity statements for the last year, along with current tax returns, loss and profit statements, and more. You might also be required to sign an income declaration form. A low doc loan can be pretty straightforward, however.

A Low Doc Home Loan Can Benefit Most Self-Employed Individuals

Low documentation loans might be fairly new compared to other finance solutions, but they are an incredibly viable option to consider. While the interest rates are typically set higher, they are fixed and can be more affordable depending on your circumstances. Of course, you will likely need a larger deposit but again, this works to your advantage. Best of all, you require less paperwork to support your loan application. A low doc home loan can be a great choice when you’re starting up a small business or are self-employed and looking to get on the property ladder. Read more in this site: