Low Doc Mortgages in Australia
Low Doc Mortgages: Due to the recent sub-prime mortgage meltdown, many lenders have changed the way they operate. Before 2007, you used to be able to walk into a bank with a poor credit score and get no money down loans approved. This ultimately led to many people defaulting on the mortgages because of the predatory loans that were offered to them. Because of this, many lenders want to see a good credit rating when looking mortgage loan applications. This is especially the case for low doc mortgages.
Low doc mortgages allow the borrower to get approval for a low doc loan without proving their income by standard means. The lenders usually require the borrower to show a couple years worth of tax receipts for the loans, as well as recent bank statements. These low doc loans are ideal for people who are self-employed and have a difficult time trying proving their income. Lenders look at the borrower’s credit score to determine whether or not they are likely to repay the loan.
Another factor that many lenders also consider when approving low doc mortgages is the borrower’s debt to income ratio. A low ratio means that the borrower is a in a good position financially. Creditors don’t want to give additional loans to someone who is already strapped with a large amount of debt.
If you are looking to apply for low doc loan, you should be sure to look at variety of different sources that offer these loans. Be sure to get comprehensive quotes from different low doc lenders to ensure that you get the best rate for you loan.