Getting Lo Doc Loans
September 24, 2013
If your only choice is to apply for Lo Doc loans, it is important to determine if you can afford repayment rates. Remember that lenders usually charge very high interest rates in the absence of the normal requirements for regular loans. Another condition for low doc loans is mortgage insurance which bloats the costs further. The rule is that this type of mortgage covers until 80% of the property value.
The three major categories of low document loans are the following:
Self-declared Income – The lender agrees to give 80% of the property value based solely on the signed statement of income without any verification of income but a higher interest charge.
Account Statement – This requires confirmation such as a certification from your accountant. However, the interest is similar to regular housing loans.
Asset Lend – This loan depends on the value of your home with lower property value and higher interest rates.
As mentioned previously, the Lo Doc loans have high interest rates. Yet, if you are able to submit more financial confirmation, the interest goes lower. You cannot bypass the mortgage insurance and higher deposit is demanded.
Lo Doc loans or low document loans are meant for individuals who look forward to purchase real estate but are not eligible for regular property mortgage. The basic difference is that you will not be obliged to submit documents such as proof of income as well as assets and liabilities. It makes use of the process of self-verification. You just need to declare your income without the certified documentation.
These low document loans are intended for those who possess equity or savings deposits and are not capable of presenting proof of regular earnings. These are casual employees, self-employed entrepreneurs of consumers with negative credit ratings.
Almost 20% of the property value should be given by the buyer. In fact, you may even be asked for additional security such as your automobile or some other investments. The loan period is short, which is usually one year, forcing the debtor to opt for refinancing.
Think hard before applying for this loan!
Call us at 0435853375 since we can help you with this concern.