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Lo-doc home loans - an ideal choice for self-employed individuals
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Posted On :
Aug-30-2011
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Article Word Count :
416
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The above article informs the readers about the lo-doc home loans given by the financial institutions. It also classifies the criteria when it comes to taking up or applying for this loan type.The lo-document loan caters predominantly to self-employed borrowers who are not capable to provide complete financial statements and other important evidences about their income.
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A "Lo Doc" or the "Lo-doc home loans" are mortgage or home loans given to the applicants even after the documentation for verification of the applicant’s income is not required. However, all other documentation is necessary to be shown before the financial institution. Incidentally, today many financial institutions offer alternatives to self-employed people who don’t have traditional proof of income in the form of lo-doc home loans. The lo-document loan caters predominantly to self-employed borrowers who are not capable to provide complete financial statements and other important evidences about their income.
Ideally, the lo-doc home loans are most suited to independent contractors, self-employed individuals, investors, ex-bankrupts, credit rating impaired or clients with arrears on current mortgages and the borrowers who have been rejected by the traditional money-lenders. However, lo-doc home loans are slightly more expensive than traditional loans due to their high level risk profile. This loan is primarily for people who are looking forward to purchase investment properties, residential or re-financing existing housing property. At the same time, when the applicant doesn’t have PAYG (Pay-as-you-go tax) or current tax returns that will confirm their income that normally sustains a standard investment loan.
Nevertheless, most money-lending institutions require lo-doc home loan borrowers to take out lenders’ mortgage insurance when borrowing up to 80 per cent of the property value. Few lenders also charge a higher interest rate for these products and these rates can be reduced after a certain period of time or when you are able to produce tax returns. Few of the features that give credibility to the lo-doc home loans are listed below:
Self-certification instead of traditional proof of income giving way to less paperwork and smooth application process
can only borrow up to 80 per cent of property value
may require lender’s mortgage insurance, adding to cost of loan
interest rate discounts may apply after specific time period
may be eligible for lower interest rate if able to supply tax returns at a later date
requires clean credit history
lenders may not lend in high risk areas such as inner city high-rises or large rural allotments
generally higher interest rates with less features than a traditional loan
The lo-doc home loans can be categorized into three types namely, No Ratio Loans, No Doc Loans and the Stated-Income (Low Doc) Loans. The market is full of growing range of lo-doc products with many lenders offering standard and premium lo-doc home loans with availability of choice for fixed or variable interest rates.
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Article Source :
http://www.articleseen.com/Article_Lo-doc home loans - an ideal choice for self-employed individuals_78172.aspx
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Author Resource :
For more informationhome about Lo-doc home loans, best home loans australia, home loan rates. NQ Home Loans, fully qualified and accredited brokers provides cheapest and the best home loans in Australia . Visit :-nqhomeloans.com.au
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Keywords :
lo doc home loans, best home loans australia,
Category :
Finance
:
Loans
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