Low Doc Home Loans

What Are the Benefits of a Low Doc Home Loan?

Low doc home loans are the saviour of those who simply don’t fit into the ‘normal’ categories that most banks have set up, but who have ample capacity to repay a loan. Low doc loans may allow you to enter the property market at a time when it’s financially favourable, without waiting for arbitrary markers in your business’s life. In a situation where a spouse would have taken the entire responsibility for the loan, low doc loans allow every person who is practically responsible for maintaining the house to also be legally responsible for it.

Because they technically represent a higher risk to the bank, low doc loans may come with extra conditions designed to decrease that risk. You may have to pay Lender’s Mortgage Insurance on any LVR over 60% and may not be able to borrow more than 80% of your LVR. You also may not have access to redraw facilities or lines of credit which are available with standard home loans.

• The ability to purchase a home: Some borrowers could be stuck in the rent cycle forever, if they simply don’t meet the banks’ documentation requirements. A low doc loan allows these people with the capacity to pay to purchase a home.
• Timed entry into the property market: Rather than waiting until your business has grown to a point where it is required to fill out activity statements, or where it employs you (thereby making the standard proof of income accessible to you), having access to low doc loans allows you to enter the property market at a time which is financially favourable.
• Discounts available for more documentation: Even if you technically need a low doc loan, many lenders provide discounts for providing additional documentation, or for lowering your LVR below their set point.
• A good credit history counts: If you have a solid credit rating, this will be an advantage in the low doc home loan application proces