Low Documentation Mortgage
Low doc home loans are targeted at people who typically have less regular income. Self-employed workers or seasonal employees may have trouble providing enough documentation to support a regular home loan application. These loans allow you to get approval for a home loan without as much documentation, but you will pay a higher interest rate.
If you cannot provide sufficient evidence of your income, usually your lender will require you to sign a declaration of your income.
Loan TermsThe loan term will be as long as you need it. You may choose to pay the loan off over 30 years or pay more each month to reduce the term of the loan.
Repayment OptionsYou still repay the loan the same as any regular home loan, either with monthly or fortnightly repayments. Some lenders may allow you to make extra repayments for free with a low doc home loan, as well as access to a redraw account, but you will need to check with your lender.
RequirementsYou will need to demonstrate you have a clear credit history and you will also be required to complete an income declaration form if you cannot provide proof of income. You may have to pay lenders mortgage insurance which can be expensive, although some lenders will absorb this cost themselves.
If you are able to provide financial statements at a later date, and tax returns, can usually request to have the loan re-assessed in order to have it revert to a standard loan with a lower interest rate.
Interest RatesThe rate for a low doc home loan will be higher than the standard rate. This is because of the obviously increased risk to the lender. You may also be asked to pay extra fees known as ‘risk fees’ and lenders mortgage insurance.
Don’t get caught out! Find out if a low doc home loan is right for you by talking to your local mortgage broker on 
.