Low Doc Mortgage
Low doc mortgages are traditionally for borrowers who are unable to provide sufficient evidence of income, such as self employed workers.
The loan allows you to get finance without the need to show the same documentation as a regular home loan would require. Instead, you sign a self declaration of your income. There are a few variations to low doc home loans so it is best to speak with Your Local Melbourne Mortgage Broker before making any decisions.The application must still be made in writing and most low doc loans will cover up to 80%of the value of the property. The more existing equity you have or the larger the deposit you have saved, the more you will be able to borrow. Mortgage rates will be higher with type of loan.
Self declared incomeThis is the most common form of low doc loan. The lender offers a home loan when you sign a declaration of income. The signed declaration states that you receive the stated income, and you do not need to show accompanying evidence. When buying a home, a low doc mortgage may be the only option for some buyers.
Consider the following facts about low doc loans:
- higher interest rate is usually applied, although the more financial documentation you can produce, the lower the rate often is
- additional and inflated fees and charges may apply
- mortgage insurance may be payable
- higher deposit is usually required (often up to 20% of the property value needs to be provided by the purchaser)
- added security could be required, such as a car or other investments
- a shorter loan period may apply. Some loans require the applicant to refinance after a set period of time, sometimes as short as 1 year.
Low doc loans are a flexible financing solution for the self-employed who have income and assets, but may not have the usual paperwork like financial statements or tax returns ready at the time of application.
Talk to your local mortgage brokers before you do anything else. We can do all the hard work for you and get you on your way to a great home loan in no time. Call us on 1300 787665 or submit your details on line.