Low-Doc and No-Doc Home Loans for Borrowers with No Financial Reports
Typically used by the self-employed or borrowers with no financial reports, Low-Documentation (Low-doc) and No-Documentation (No-doc) Home Loans require very little or no documentation to get approval. Rather than produce payslips, tax returns or other proof of income, the lender would ask that you state your income – a process called self-verification. Generally speaking, the less information required, the higher the interest rate and the greater the deposit required.
Get the Facts on Your Low-Doc and No-Doc Home Loan
If you would like more information on Low-Doc and No-Doc Home Loans or to talk to a mortgage broker about home loan options that are in your best interest, call us on 13 LOAN (or +61 2 9249 3739 for international callers) or email us the form on this page and we will return your contact within 2 business hours.
Loan Vaule Ratio (LVR) Requirements for Low-Doc and No-Doc Home Loans
Your Loan Value Ratio is the percentage of the property value that you intend to borrow. Most mainstream lenders will only allow a maximum LVR of up to 80% of the property value for low-doc home loans; if you would like to borrow more than this, then you would need to go to a specialist lender who deals with low documentation home loans. The highest LVR that you can borrow is 95% but, as the lender is assuming more risk, your interest rates, LMI and associated fees will be higher. There are some specialist low-doc lenders who offer competitive rates, talk to your local mortgage broker and find out if there is a better deal for you.
Advantages and Disadvantages of Low-Doc and No-Doc Home Loans
| Pros | Cons |
| If you lack sufficient proof of income in the form of pay checks or tax returns then low-doc and no-doc loans could provide the means to getting a home loan. | Your interest rates are generally higher than standard loans. |
| Lenders will ask that you pay additional fees and charges, including ‘risk fees’. | |
| You may have to pay lender’s mortgage insurance if you are borrowing up to 60% of the property value. |
Low-Doc and No-Doc Home Loans Repayments
As the financial statements will be limited or not provided, you will need to give the lender an accurate picture of your finances – and therefore you will need to be certain you can afford the repayments. Your local mortgage broker will be able to assist you determine your repayments.
More information and home loan help
For more information on how and where to find a better home loan deal from an extensive panel of Australian banks and secure mortgage lenders, or to speak to your local area mortgage expert, contact us on 13 LOAN (direct +61 2 9249 3739)
