Low Documentation or Low Doc Home Loans are specially designed financial solutions for the people engaged in small businesses or self employment options. If you are facing difficulty in furnishing all the documents relating to your income and other financial conditions then you can apply for Low Doc Home Loans as they are available without all or any tax return or financial statement. These loans are available with almost all the reputed banks designed to help self employed persons without any need of enormous financial documentation. In fact, it is difficult for the self-employed persons to arrange tons of documents.
Various Low Doc Home Loans available for self employed persons
Standard Variable Rate Home Loans: These types of low doc home loans are available with various other facilities including flexible repayment, repayment redraw, enabling you to make extra repayment, without any early exit fee along with other benefits of a mortgage interest saver account.
Fixed rate Low Doc Home Loan: This Low Doc home loan offers you to enjoy the facility of making plans for using finances available through this loan after fixing the term of repayment for 5, 7, 10 or 15 years as the repayment amount is not going to change throughout the time period chosen by you.
Base variable rate low doc home loan: This type of low doc home loan is available with added facility of redraw the repayment, unlimited extra repayment that can be used flexibly as other economizer home loans.
Line of credit low doc home loan: This home loan option empowers you to use your equity whenever needed which enables you to get refinanced if funds are needed in future for fresh investment.
Though Low doc loans are best home loan solution for self employed persons which can be relied undoubtedly but one must know the advantages and disadvantages attached to these loans before applying for them.
Advantages of low doc home loans
- Paperwork is reduced to negligible as the borrower can get the loan by simply filling a declaration form
- No or few documents like tax returns or financial reports etc. are required
- Low doc home loans are available upto 90% of market value of property
- You can use these loans for investing on or purchasing the self occupied property
- You can choose from various loan options in this category of home loans
- Redraw repayment facility, flexible repayment, unlimited extra repayment, without any early exit fee are some of the extra features of low doc home loans for self employed persons
Disadvantages of low doc home loans
- These loans are available at higher interest rates
- Standard variable rate low doc home loans are usually offered after paying Mortgage Insurance Fee
- Amount of repayment can be larger than other home loan options
Thus, Low Doc Home Loans are the best option for self employed persons if they get information about stamp fee and other expenses along with the repayment amount before applying for them by using home loan calculators available with the financial institutions. This will enable them to evaluate their borrowing capacity.