14 Mar 2022

Low Doc Loan: How To Qualify for It?

Low Doc Loan

The late 2000s saw the creation of several new home loan variations. Before Australia experienced its housing crisis, the mortgage that most homeowners knew was the conventional home loan. Things changed and the population saw several changes too. More individuals became small business owners, independent contractors, and gig workers. Thus, they couldn’t come up with the full financial documentation that the conventional mortgage requires.

Among the new mortgage options was the low doc loan. To qualify for it, homebuyers must work as freelancers or own a small business. Lenders know that homebuyers in this part of the workforce cannot provide full financial documentation. Instead, they can provide alternative documents that prove their financial viability.

Lenders will encourage applicants for low doc loans to provide a 20% deposit. This improves their chances of obtaining a mortgage; it also lowers their interest rate. Next, applicants will provide three months’ worth of bank statements. The statements give lenders data on the amount of incoming income. Plus, it shows lenders your spending habits.

Low doc loan applicants will also provide a letter confirming their finances from their accountant and provide a signed affidavit. 

Mortgage House works with an array of clients including those who qualify for specialised mortgages. As a non-bank lender, we issue more home loans to homebuyers that require financing alternatives to the conventional mortgage. Plus, we explore competitive home loan interest rates.

Low Doc Loan Conclusion

The low doc loan helps independent contractors and small business owners become homeowners. Mortgage House is one lender that issued these home loans. Contact our loan specialists to obtain more information.

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