Low-Doc Home Loan

Key features

Aimed at self-employed borrowers, a low- doc home loan is exactly that- it requires far less documentation to prove your income, savings history and capacity to repay the home loan. You would need to show statements from a business trading account for three months to verify your income, or details of previous tax returns if you have them.

Advantages

Low-doc home loans have allowed thousands of Australians who have been rejected by mainstream credit providers to obtain a mortgage. Allowing borrowers to supply alternative documentation to income and savings histories has opened up the world of home ownership to self employed people. If you can supply sufficient documentation you will usually be able to borrow at mainstream rates lending rates.

Considerations

Low-doc lenders 'rate for risk', meaning that the perceived level of risk in lending to you will determine the interest rate you are charged. If it turns out to be extremely high, you may be better off not borrowing until your circumstances improve. Ensure that the lenders optimism doesn't result in you being sucked in to borrowing more than you can comfortably repay each month.

Suitable for

Low-doc home loans are popular with those who struggle to verify their income to mainstream lenders, including the self-employed, particularly those experiencing timing delays in preparing their tax returns. They're also designed for contract and seasonal workers, or families who have just moved to Australia.

Low Doc Home Loans

Institution	Actual Rate	Comparison Rate *	Institution	Actual Rate	Comparison Rate *
	7.80%	7.90%		7.95%	8.04%
	7.64%	7.59%		7.95%	8.04%
	8.12%	N/A		7.81%	7.94%
	7.58%	7.58%		7.86%	7.92%

* Comparison rates are based on a loan amount of $300,000 over a 30 year term. Comparison rate schedules are available via each lender’s website or by contacting Compare-Homeloans. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates are effective as of 11-01-2011.

All information provided is a guide only and may not be complete for your purposes. Whilst displayed rates are regularly updated, neither Compare-Homeloans nor the Providers warrants the accuracy of any information and you should confirm it with the Provider before acting on it. Except for responsibilities implied by law which cannot be excluded, neither Compare-Homeloans nor the Provider is responsible for any loss, damage, cost or expense incurred by you as a result of any error, omission, or misrepresentation in relation to the data herein.