What Is A Low Doc Or No Doc Home Loan

By Author: Cody Kinchela
Total Articles: 22
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No doc or low doc home loan is a process of mortgaging where the documentation for verification of the income is not required. Apart from the income certificate from an authorised department, everything else is required for the application of a home loan. Hence when you are looking out for low doc home loans in Melbourne this is the right kind of option for you.



These loans are specifically designed for self-employed, independent contractors, investors, credit personal, or bankrupt clients who don't work for any company and are individuals.
For them getting an income certificate is tough as their income varies from time to time and is not consistent. This can also be taken by people whose earlier home loan application was rejected by traditional lenders that is a bank or any other financial institutions.



Any kind of financial institutions like Bank and other sectors require a number of documents one of which is an income certificate that shows your income and depending on that the loan is granted. The income of yours helps the institutions to discuss the total loan amount that can be disbursed to you. It also shows how much you are capable to repay the loan or you will be a defaulter.



When you opt for no doc or low doc home loan you expect the entire process to be less time taking an effective. However, when you are up for this kind of home loans you should be ready for an expensive deal as these are slightly higher than the traditional loans due to higher risk profile. The interest rates are specifically higher than the traditional ones which lead to paying more than the conventional ones.



This kind of schemes is specifically directed towards the people who want to invest in properties or refinance existing housing property and does not own current taxation returns that specify their income. This is required in the loans taken from the bank without fail.



Specifically, there are three kinds of low doc loans.



No ratio loans



these are specifically for the lender who does not want to show their income. This leads to no debt to income ratio when the lender handles it. The body needs to have good credit and an abundance of assets that leads to no ratio loans. Giving this information as yours the lender that the loan amount will be repaid within the time. With the information of assets and credit, the lender doesn't have to remind the borrower to repair the amount and the process becomes easy.



No doc loans



This scheme requires the least amount of documentation and hence one of the most favourites among the borrowers and lenders. Also offers maximum privacy to the borrowers as they don't have to give any information relating to finance yet the loan is sanctioned effortlessly.



Stated income



If you have a job that doesn't have a fixed income and it differentiates week to week then this is something you are looking forward to your home loan. However, this is different from the other two as it requires some form of financial income that shows your earnings for a period of 2 years. You can also be asked for tax return files and bank statement.



So, these were three of the loc doc home loans in Melbourne and different parts of Australia you can have a look at if you are not in a position to disclose your income status for a debt. You need to search for institutions that offer these schemes and have a talk with them for elaborate information. All of these will give you a hassle-free experience with low documentation. However, you should be true to yourself and repay the loan in the given time to save yourself from being a defaulter.

About the Author: This contribution has been made by Cody Kinchela who has written a number of articles on Low Doc Home Loans Melbourne and provides fruitful information.