The low doc loans are specially designed to suit self employed and small business owners that find it really difficult to avail loans as per their requirements from the traditional banking sources. These loans are very popular among professionals with limited earning capacity because it allows them to apply for the funds without producing regular statements or tax returns.
Presently, low doc loans are among the major constituents in fueling the fast paced growth of the mortgage industry. Most of the mortgage broking houses provide the customer with a customized low doc home loan. It has become hassle free in true terms to avail such loans with minimum strings attached. Therefore, mortgage industry is steadily making way into your business with the provision of low cost doc loans and helping you in achieving your business ambitions.
What makes them different from the traditional loans?
In case of low doc home loans, the applicant is not required to provide much of the paper work otherwise needed. The procedure is very simple and it works on a method called self-verification. Under this procedure, the candidate is required to declare his active source of income. Thereafter the lenders decide if the applicant’s proposal is worth acceptance and the discretion follows subsequently.
The loan market has seen a huge surge of applications from low income individuals in past few years. However, due to strict guidelines fixed by the central banking authority, such individuals find it very difficult to avail loans. Even if the application is accepted, the procedure is so tiresome that the candidate loses interest before its over. A low doc home loan is therefore the simplest, quickest and comparatively hassle free finance product existing the market at present.
The best feature of the low doc loan is that the borrower gains access to a range of loan features and options that were previously unheard of or unavailable. There is an widening range of low doc products in the market where lenders offer such loans with the choice of fixed or variable interest rates. Though, there are some strings attached with low doc home loans but the advantages associated with these revolutionary financial products outnumber
the cons easily.
Types of low doc loans:
- Self declared: This is the most common low doc loan, where a lender offers a loan on a signed declaration of income statement by the applicant.
- Account statement: It requires more substantial documentation evidence than the former but the rate of interest matches up to the standard loans in the market.
- Asset lend: This type of home loans are offered with absolutely no requirement of signed declaration from the applicant. It is secured purely on the basis of value of property.
However, failure to declare taxable income and possession of low doc home loans on the basis of forged documents is a declared offense and invites strict penalties.