A low documentation or no documentation mortgage – though not very popular, not much preferred – in some situations may be the most appropriate or the only option for self-employed borrowers looking for a home loan.
A low doc home loan is more suitable for borrowers who have a complex income stream, and their income cannot be suitably substantiated with traditional documentation process.
Low doc home loans are considered as riskier by lenders, hence as compared to other loans these loans would usually have a higher rate of interest, low Loan to Value Ratio (LVR) and might also attract a higher processing fee.
Different lenders may have different requirements regarding the extra evidence needed to substantiate the earnings and the repayment capacity of the borrower.
Generally, the lenders may ask for additional evidence in the form of Accoutant’s Letter, Self-Certification declaration, Business Activity Statements (BAS), Personal tax returns, Bank Statements, Proof of ABN / GST registrations, List of other assets you possess etc.
In the light of all of the above, it is very important for the borrower to sit down with an experienced broker who understands your unique situation and is well aware of the entire loan process, thereby potentially saving you from recurring loan rejections which might negatively impact your credit score.
One phone call to us and we can:
1. Address all your questions and concerns
2. Explain the pros and cons of low doc home loan
3. Walk you through the entire low doc home loan process
4. Guide you regarding the paperwork needed
5. Work out your Net Income and Repayment capacity
6. Work out the amount of loan you should go for
7. Search the best product and lender as per your unique circumstance