February 2023 - Best Finance Loans

Purchase a Property with a Low Doc Loan

by Ronny CruickshankFebruary 17, 2023February 18, 2023

Low doc home loans are a popular option to consider when buying a property. Traditional loans might not always be suitable for your current situation and that can put you in a tricky position. Fortunately, low documentation loans may solve that problem. Purchasing a property with a low documentation home loan can be a great idea because it’s viable and practical for most buyers too. So, what do you need to know about purchasing a property with a low documentation home loan?

A Sizeable Deposit is Necessary

Lenders have to limit their risks; most won’t offer a loan if you don’t have at least a 20% deposit in the bank. You also need to consider stamp duty (as that needs to be paid too). So, while it might not seem ideal, you do need a sizeable deposit. However, this works in your favour when you take out a low doc home loan. If you have a larger deposit to put down on a home, you borrow less. It also shows you have funds to secure the home; it might even reduce interest rates.

Savings Show Lenders You’re a Good Risk

Let’s be honest, a low documentation loan can be expensive if you don’t have a good credit history (or score) and little savings in the bank. Having savings shows lenders you know how to manage your money, along with being a good risk. This is why it’s important to put money aside for your deposit but also extra for those unexpected costs. Savings impress lenders, regardless of how much you want to borrow. Low doc home loans can be more affordable when you have money set aside. Fortunately, this can be in equity, cash, and shares.

Getting Approval if You’re a First-Time Buyer

When you are trying to get on the property ladder, it can be incredibly difficult. The markets move fast, and you need to put aside every penny possible for the deposit and other expenses. It’s not easy, even when you have a great job and lots of money in the bank. There is also confusion over low documentation loans and who’ll get approval. First-time buyers can get a low doc loan; however, you do need sufficient funds available. This means you have a good deposit and other savings available. Also visit the link to read more about Full Doc and a Low Doc Loan Vs Full Doc Loan.

Are Low Doc Home Loans Safe?

Borrowing money in any form is always a risk for both the borrower and lender. Of course, it all comes down to your finances and the lender you choose. For instance, you don’t have a steady income. Your credit score is also poor. Lenders, if they approve your loan application, will likely increase the interest rate because you’re not a good risk. On the other hand, you apply for a low doc loan and have excellent credit. You have a 30% deposit available and a steady income. You’re a good risk to any lender and may see a decrease in interest rates also. You can also read about Income and income support by visiting https://www.aihw.gov.au/reports/australias-welfare/income-support

Purchase Your Dream Property

Getting on the property ladder can be exciting. It’s a wonderful achievement but can be difficult to reach. When you are self-employed or a contractor, that goal can seem a million miles away. Saving enough money for the deposit is only half the battle; you also have to find a suitable loan. That’s tough, but low documentation loans offer a simple route. Low doc home loans can be perfect for any buyer.

How Do Low Doc and No Doc Home Loans in Australia Work?

by Ronny CruickshankFebruary 17, 2023February 18, 2023

No doc and low doc loans have become a must-have for contractors, self-employed, and small business owners everywhere. Getting a mortgage is not easy at the best of times, when you have tricky employment status, that makes the process tougher. Your financial circumstances might have changed since your last tax returns or not completed to the standard a traditional lender would require. It’s a problem and may prevent you from getting a home loan. No and low documentation loans may prove the answer. So, how do these loans work?

What is a No or Low Doc Home Loan

A no documentation loan does not require proof of income. A low doc loan requires documentation to prove your income. No documentation home loans can be difficult to obtain at times because a specialist lender will be required. Low doc loans are useful for those who have paperwork to prove their income but won’t qualify for a standard loan. Typically, low doc and no documentation home loans tend to come with a higher rate of interest – however – this can be reduced depending on your circumstances.

Who Can Apply for a No or Low Documentation Loan?

These loans were designed for those who are self-employed, a contractor, or small business owners. A low doc home loan can be an important tool for you, especially when you aren’t eligible for a standard loan. You have the means to pay the loan but don’t have the supporting paperwork to back your claim. That is something you can get around with a low documentation loan. While you still have to show some paperwork with the application, it’s far less than with full doc loans. You can read more about Purchase a Property with a Low Doc Loan by visiting https://www.best-finance-loans.net/purchase-a-property-with-a-low-doc-loan/

Will You Be Guaranteed a Loan?

Low and no documentation loans can be useful for all sorts of reasons; however, there are no guarantees with these loans. For example, you earn very little and don’t have any personal savings to fall back on. You would not be an ideal candidate because you’re a bad risk. On the other hand, your credit rating is excellent. You have a year’s worth of personal banking statements and BAS, not to mention over savings to make up a 35% deposit. This would put you in good stead with most lenders and make getting low doc loans easier. Click here to read about Loans by private companies.

However, it is important to understand that loan approval comes down to your current circumstances. While you’re an ideal candidate for a low doc home loan, there are no guarantees your application will be accepted. It’s important to understand that so you don’t get your hopes too high. Of course, with the right supporting paperwork, a loan shouldn’t be out of your reach.

Speak to a Specialist

Low documentation home loans can be a popular choice for most, but they aren’t without risk. It’s important to speak to a professional to find the right lender and loan. You don’t want to rush this decision either, so it’s imperative to find the best lender. Low doc loans can be useful because they allow you to find a simple way to purchase a property.

Full Doc and a Low Doc Loan Vs Full Doc Loan

by Ronny CruickshankFebruary 17, 2023February 18, 2023

A low doc home loan has become hugely popular within the last few years. It is partly down to convenience and versatility. For most, they turn to low documentation loans because they don’t qualify for a standard bank loan. Being turned down for a standard loan because of your work status can create a never-ending nightmare. Getting a mortgage and vehicle loan could be almost impossible and that’s why more look to low documentation loans. So, what are the differences between a low doc and full doc loan, and which is best?

It’s All Down to Documentation

Full doc and low doc loans are quite similar to one another, the main difference between them is the amount of paperwork required. For instance, when you apply for a bank loan, you must show proof of income (as you have the means to repay the loan). Unfortunately, you might not have sufficient proof because you’re self-employed. Low doc loans require far less documentation during the application stage.

GST registration, profit and loss statements, ABN, and business activity statements, along with your latest tax returns might be sufficient to obtain a low documentation loan. On the other hand, these items alone wouldn’t be enough to secure a standard loan or a full documentation loan.

A Good Credit Score Can Make a Huge Difference

Unlike a full documentation loan, a low doc home loan will have different rates of interest. For example, since you are applying for a low documentation loan, lenders will put you in the ‘high risk’ category. It is because of your current work status and the fact you don’t meet the criteria for traditional bank loans. While the interest rates tend to be higher with a low documentation loan, you could negotiate for better terms if you have good credit. A good credit score and history can make a world of difference when applying for a loan. Click here to read more about How Do Low Doc and No Doc Home Loans in Australia Work?

Are Low Doc Loans Worth Considering?

It can be incredibly difficult to obtain any loan and when you’re not eligible for a standard loan, you can worry about alternative solutions. A low documentation loan can be an option to consider because it is viable. A low doc home loan allows you to get finance for your dream home; of course, higher interest rates and a bigger deposit might be required. On the flip side, however, good credit puts you in a strong position. If you’re a good prospect to the lender, you are more likely to find a suitable loan.

Choose the Right Loan for You

You don’t want to borrow money, but it has become a necessity of modern life. Buying things outright is becoming tougher and just isn’t practical at times. Low documentation loans offer a good alternative for those who cannot get a traditional or standard bank loan. You have a flexible loan that can secure finance when it’s needed most. Plus, a good credit score can ensure your loan is more affordable. To find out more, check out www.lowdocloansco.com.au.