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Low Doc Home Loans – The Perfect Solution for Self Employed

Todays Date: January 16, 2019

Many people have never heard of low doc home loans. These are actually alternative mortgage options for people that are self employed and have no documentation to prove their income levels. Generally, the proof of income used here is the tax returns and financial statements you have.

The Basics – Before selecting the perfect home you really need to search around for your mortgage especially if you know you need one of the low doc home loans. It is very difficult to estimate who and what type of person is approved for this loan as each case is different. Banks realize these so they carefully analyze each different case and each lender has different eligibility requirements. This is why the best thing you can do is apply to see if you qualify.

Low Doc Home Loans Assessments

Different lenders assess and approve this type of loan differently, but you can expect the following in most situations:

    • Most lenders will offer a low documentation loan when there is a 60 percent loan to value ratio. In other words, when they only need to loan 60 percent of the value of the home. Others may offer an 80 percent loan to value ratio.
    • Most lenders require and ABN or GST registration, with at least two years of antiquity. Although some lenders may accept a newer registration if the loan to value ratio is lower.
    • Acceptable Income levels: a lender will carefully scrutinize the income levels being declared to make sure they are at acceptable levels. For instance, a young borrower who declares an income of over $100,000 a year may be carefully scrutinized for the veracity of his declaration.
    • A lender likes to see that you have more assets than your gross income level. This is called asset to income ratio.
    • Good credit is especially important when you are planning on applying for a low documentation loan.
    • Property security: It is important to choose the property or home well once approved for a low documentation loan. Banks do no t like a property that is in disrepair or which may be difficult to resell when offering this type of loan. They will accept prime properties in good neighborhoods which are in high demand.

Most lenders are not inclined to approve low doc loans. This is why you need to look for a specialized lender like Freedom Loans.

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