Low doc loans were designed for casual workers and self-employed individuals who cannot qualify or afford traditional home loans. Although they still have to go through the normal application process, they are not required to submit documents such as assets and liabilities and proof of income, since low doc business loans depend on self-verification method wherein submitted documents are not verified by the company. This is an advantage for people whose credit history is not good, since it gives them a big chance of qualifying for a loan.
Buying a property at present needs a big amount of money and most people would choose to apply for a loan to finance the transaction. However, not everyone has the qualifications or capability to go through the credit checks that are required by loan companies. With low doc home loans, more people are given better home financing options.
There are three kinds of low doc loans, the first being the self-income loan. This kind of loan only calls for a declaration of income to be made by the borrower, to be able to qualify. No verification is required and the amount that could be loaned will be up to eighty percent of the amount of the property. The interest rates for this type of low doc loan are higher.
Another kind of low doc loan is the account statement, which calls for a more substantial evidence of income in order to qualify. The third kind is the asset loan, which does not need any declaration or proof of income at all, as it is secured through the value of the asset that is being loaned. However, the loanable amount is rather low and the interest rate is very high. Because of the present financial crisis, a number of financial institutions are also asking for more requirements for security reasons. The BAS or Business Activity Statements, which is a tax report that illustrates your obligations and entitlements, is now being required by some well-known lending companies.
Because of the increasing popularity of low doc loans, their benefits were made more favorable and extensive. The main advantages that you can get from low doc personal loans are:
* Quick result because the loan procedure takes lesser amount of time and is very simple
* There are less formalities and documentations
* The formalities that you need to fulfill can be accomplished easily
* You can apply for a loan right at your office desk, even if you have a very busy schedule, since you can complete the application in seconds
* You get the result so quickly that if you qualify, you can get the money in a day or two
These are just the basic advantages that you can get from low doc loans, which would allow you to build your dream home easily and quickly. However, before getting a loan, try to learn all of its aspects, since there are many terms and conditions that you need to understand, if you want to utilize low doc loans to your maximum benefit.