Low doc loans for self employed persons-Hassle free Finance

| March 7, 2013

The fundamental purpose of low doc loans is to speed up the mortgage process by requiring little or no documentation on behalf of an applicant. Self employed applicants in particular are benefited by these loan schemes as they hardly have any documentation to support the facts that you state regarding the monthly income, financial stability etc. However, you do need to provide essential information such as your salary history and credit identification number.

Low doc home loans did invite some criticism during the recent credit crunch but they’re once again becoming popular with self-employed professionals and business owners in Australia. Read on to know more on how low doc loans can help you avail hassle free finance!

Easy Loan Application Process

You just need to follow a regular loan application process. When applying for low documentation home loans, your income is confirmed through a self-declaration. It is precisely due to this ‘self-declaration of income’ that these loan schemes were christened as ‘low-doc.’ with a low doc loan scheme; you can borrow as much as 80 percent of the total property value.
lo doc  loan quick approval
Quick Approval

Once you’ve submitted an application, a lender may take a couple of days or 2-3 weeks to review it. Most lenders take less than a week to approve or reject a loan application. When your loan application enters the underwriting phase, the lender would be checking the essential information provided. When all applicable liens, bank statements, declaration and other documentation provided with the application is successfully verified, a low doc loan stands approved.

Variety of Loan Products

Depending upon your specific finance needs, you can choose a variable or fixed rate low doc home loan. Generally, variable rate loan schemes have redraw and hundred percent offset facilities. You can also make additional payments towards the loan in future without inviting any penalties. Flexible rate loans, on the other hand, provide you a fixed loan interest rate. A maximum limit, $25000 for example, is put on the additional payment that you can make towards the loan. Many lenders also provide flexible low doc mortgage plans nowadays. In this case, a lender would be providing you a transaction account to draw money at any time. Thus, these loans are often as competitive as standard loan packages as far as the interest rate and other terms and conditions are concerned.

It is possible for an applicant to mislead a lender by providing wrong or manipulated information. It is one of the main cons associate with lo doc home loans. It is due to the wide range of benefits that these loans continue to be popular with thousands of people in the region. It is important that you seek mortgage approval only if you’re really capable of making all loan payments on time. At the same time, it is important to explore this hassle free finance option with great care. Not all lenders in the market offer flexible packages and therefore, you must compare packages on the basis of various parameters.

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Category: finance, mortgage

About the Author ()

Red Rock Mortgage Group is a specialist mortgage finance consultant an independent mortgage finance company specializing in property finance solutions for investors & borrowers with specialized lending needs. Thanks

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