Refinancing Your Low Doc Home Loan
There are so many people who are scared of qualifying for prime loans because they feel they do not meet some of the requirements set forth by lenders. One of the most common issues is not being able to present documents that will prove income like pay slips and tax returns. For these Self Employed people, a low doc home loan is possible.
This kind of loan is a great alternative because borrowers won’t have to go through the typical verification process that would otherwise deny them of a mortgage. A low doc home loan is perfect for people who do not have the necessary documents for a standard loan.
There is an easier chance of getting approved for a low doc loan because this will not use the typical verification process. Lenders who entertain applications for this type of loan are going to use a different process-a less strenuous one. You have a better chance of qualifying for a loan.
And with the help of a good mortgage broker, you should be able to quickly borrow money. Depending on your situation and how good your broker is in negotiation, you can borrow more than 80% of the property value.
Those who are eligible for these loans are freelancers, self-employed individuals, sub-contractors, and PAYG contractors.
It’s definitely going to be challenging for them to provide the necessary paperwork because of the nature of their jobs. Most of the time, these people do not work regularly. Some work only when there are available projects, so that means they don’t have regular pay slips. Some don’t even have tax returns. The absence of long-term contracts will also hurt these people’s chance of getting a standard mortgage. This is why they are more suitable for low doc loans.
Once the loan is acquired and the home is purchased, all the borrower needs to do is make sure to meet the monthly repayments.
As responsible as some individuals may be, there will always come a time when things are going to go rough. There will be times when these people experience changes that will severely affect their ability to repay the loan.
An example would be running out of projects. Some freelancers may have no work for weeks or months. And without any income, they may find it extremely difficult to pay for the mortgage.
This can be avoided by taking precautionary measures. Aside from saving enough money to use as cushion for times like these, borrowers can opt to refinance.
Refinancing will help make the monthly payments a lot easier. It is possible to take out a new loan that has better rates-one that you can better afford. A lot of people refinance because they want to enjoy lower interest rates. Some do this to consolidate debts and have only one debt.
There is just one problem: most lenders are wary of refinancing low doc loans because these loans are too risky. A low doc refinance may not be easy to get especially if you have bad credit.
But if you have the right mortgage broker, this is something you will be able to accomplish. Good mortgage brokers will know which lenders can offer you a low doc refinance loan without much difficulties.
