A low doc home loan might be the only option available to you when you need to borrow money. Many, including small business owners, freelancers, and self-employed individuals, don’t always have a solid background of income. Some can be paid excellent money but because they don’t have a regular salary (or documents to back their application), loans can be out of reach. It’s not fair and incredibly frustrating. Fortunately, low documentation home loans can be a solution to consider. So, what do you need to know about low documentation home loans?
Understanding a Low Doc Home Loan
Self-employed people have trouble with providing income verification to banks or rather documentation that meets the bank’s highest approval. It can mean they are not eligible for most standard bank loans. It’s not ideal but low doc home loans can be an alternative solution. These loans were created for self-employed people that don’t have standard documents to show their income. Remember, banks conduct thorough checks with home loans, and they want to see a steady ready of employment.
Being self-employed isn’t always as simple as that. It can also mean you don’t have the necessary documents to prove a bank and have your application approved. A low documentation home loan requires far fewer checks. While lender requirements will vary, most don’t need the same documentation as a bank. It can make it slightly easier to obtain a home loan. To find out more, check out www.lowdocloansco.com.au.
What Sort of Documents Will Be Required for a Loan?
Less documentation will be necessary to be eligible for a low doc home loan. As said previously, this will vary between lenders. Typical documentation you’ll need includes business and personal bank statements, a year’s worth of business activity statements, and a declaration from you stating you can afford the loan repayment and what you earn. You will also need to provide your ABN and registered business name. While this might seem like a lot of documentation, it is far less than what many others require. You can read more about 8 Factors That Keep You from Getting a Small Business Loan by visiting https://www.fastmoney365.com/8-factors-that-keep-you-from-getting-a-small-business-loan/
Who Can Be Eligible for a Low Doc Loan?
Low doc loans are available to a much wider audience than before. There are, however, requirements you need to meet to be eligible for a loan. For example, you must show proof of your recent work history. You need to show proof you’ve worked for the last year in the same industry. BAS statements are also needed, along with six-to-twelve months of business and personal bank statements. Of course, this may vary from the lender.
It’s important to find out what the requirements are of a lender before you approach them officially. Remember, every loan application appears on your credit report. So, you want to only apply for a loan you are certain you need and will be approved for. A low doc loan can be a great option to consider and offers more flexibility too.
A New Way to Obtain a Loan
A lot of people aren’t sure about low documentation loans because they know very little about them. They do have a higher interest rate than standard bank loans; however, the rate is fixed and remains the same for the duration. You also get smaller monthly payment options.