If you are a self-employment person or someone who doesn’t have access to the normal types of income documentation a low doc home loan may be the saving grace that you’ve been looking for. When trying to apply for a home loan as a self-employed person you may be astonished at how differently lenders treat you.
Generally to apply for a loan you need to be able to show your past two tax returns and a decision based on those documents is what will calculate how much you are entitled to borrow. A problem with this system is that if you have out of date tax returns or returns that don’t reflect your income at the present moment you won’t be given a fair amount.
As you file your tax return happens a period of time ago, lenders don’t take into consideration what has happened in between that time frame. Luckily low doc home loans exist and can benefit you greatly.
They’re made for small business owners and entrepreneurs
Low doc home loans are designed with self-employers and entrepreneurs in mind. The documentation that you need to provide to get started is a singed privacy statement, a declaration of income, some proof of identification and the application form itself.
Being self-employed shouldn’t limit your borrowing capabilities and low doc home loans can help get your foot in the housing market.
When you run your own business or if you are an entrepreneur you don’t have the luxury to sit down and go through all the procedures that banks and lenders require you to do. Luckily low doc loans are also streamlined to make the process easier.
Traditionally if you have had finance within the past 6 months it can make the process even quicker. Lenders can go to the companies that you dealt with previously and analyse what type of payments you were making and if they were on time or not.
Since there is less paperwork involved, lenders often require some security for the loaned amount. They analyse your assets and assess whether you will be able to pay back the debt. If you already own a home that’s a great stand point in proving that you can pay back the debt. However if you aren’t it’s not the end of the world. Most lenders typically require a security deposit to pay off the first few instalments of the loan.
Vast amount of options available
A great way that a low doc home loan can help you is that there are plenty of different lenders available that have opted this type of loan. Businesses and banks are aware of the changing world and that people with their own business and those that want to start one need to get into the housing market themselves.
Low doc loans aim to help those who can’t supply the traditional documentation or time during the process of acquiring a home.
There are many different lending services available each with their own benefits and downfalls. Have a look and get an estimate from multiple lenders. As they are designed for stream line you can usually fill out an application online that is send back rather quickly.
In doing so, you can obtain your own portfolio of possible lenders without having to leave your household. Look at the rates that they provide and see which service is the best for you when making your decision.