As a borrower, it’s likely you’ve taken a closer look at the mortgage market and weighed up the various types of products that are available. One of these is a low doc home loan, but it’s worth knowing that this is only really suitable for a particular group of people.
The application process is a little different than what you would expect from a standard mortgage, so if you are in the market for a low doc loan, you will need to be prepared.
Who is eligible?
A low doc loan is as the name suggests – provides finance for someone who doesn’t have the usual documentation needed to secure a traditional mortgage.
This is generally the case for people who are self-employed. They don’t have the usual pay slips and other evidence of income that you would expect from a standard job. In fact, the term low doc home loan is often interchangeable with home loan for the self-employed.
The amount of paperwork you will need depends on the lender, although generally speaking, the more evidence you have of your income, the better your chances will be of securing a loan.
What sort of evidence needs to be provided?
Your prospective lender will discuss with you the sort of information they need to see before deciding whether to grant you a low doc home loan.
In most circumstances, you’ll need to submit a signed borrower’s income declaration, your Australian Business Number and any activity statements for at least the last year. Other lenders may require additional documents, so make sure you know what they are before attending your initial meeting.
You’re likely to find there is no such thing as having too much evidence when it comes to making an application. Your lender will respond well to any details of assets and investments you have, so be prepared to show them off!