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Low Doc Property Lending for the Self-Employed

Low Doc Property Lending for the Self-Employed

If you think that property loans are only given to people who are employed, the time has come you should think again! If you are self-employed but not able to showcase your income via conventional means, then you can consider low doc property lending. This can be your solution to buying a house or land. The concept of low doc property lending first appeared in the real estate landscape of Australia back in the 1990s. Non-bankers or mortgage bankers initially established the concept for creating a niche market which is differentiated from traditional borrowing.

Tax return submission or any other financial statements are not necessary for availing such loans. Low doc property lending is a simple loan given on the basis that the applicant makes a simple declaration about the earning they make via their business.

low-doc-property

They are not No doc property lending:

It is extremely important for the potential applicant to understand that they are low doc loans and not a “no doc” one. Hence, the document required to get such kind of lending are much lesser than usual traditional loans. Low doc property loans have been designed keeping self-employed applicants in mind. Even if you cannot provide tax returns of the business for the previous two years as a basic proof of income still some alternate documents like the following can help you out. Following are the basic document requirement for low doc property lending.

  • The borrower must possess a clean credit history.
  • Maximum amount of lending can be around 80% of the value of the property.
  • Property valuation done.
  • One who does not have any other mortgages over a property.
  • Must be a self-employed individual for a minimum of one-year time.

What are the features of low doc property lending?

With loc doc property lending, you get almost all the features that a standard home loan offer. Some of the common features are listed below.

  • Interest-only option.
  • Extra repayment facility.
  • Fixed rates of interest.
  • Option for split-loans.
  • Line of credit.
  • 100% offset account.

What is not available for low doc property loans are as follows.

Understanding this list is equally important for the potential applicant:

  • Introductory rates of interest.
  • Guarantees from third parties.
  • Repayment holidays.
  • Security substitutes.

How to get approval for low doc property lending?

Here is how you get approval for low doc property lending:

  1. Find out what documents you need to provide to the lender, what your exact lending needs are and the list of qualified lenders you can approach.
  2. Select the lender who has the lowest interest rates and fees and offers the basic loan features.
  3. Remember to provide only the documents asked for and nothing extra. The application for the low doc property lending must be made in such a way that it favors the lender.

Can you move to a standard home loan?

Many lenders will allow the borrower to move from low doc property lending mode to a standard home loan after a specific period. However, this is allowed when all repayments and tax returns due are paid off by the borrower. You can choose a lender who is flexible in such shifts.

Low doc property lending today can make your dreams of owning a house come true without having to show extensive income proof documentation. Select your lender with caution and you should be ready to start looking for that ideal house shortly.

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