A Guide on What to Ask Your Low-Doc Lender
If you are getting a low doc home loan you will generally be a self employed person who is not able to get a regular home loan because of the inability to provide some of the required documents of normal loans. However, like all loans different providers may have different requirements and regulations for their loans. Therefore, if you are getting a low doc home loan you should know what to ask your low doc lender so you know all the details of the loan. This article will outline some important questions that you should ask your low doc lender.
How many debts can you consolidate onto one low-doc home loan?
If you are planning on consolidating many debts onto your low doc home loan or would like to option to do so if the need arises then you should ask your lender if this is allowed. Some lenders will only let you have your home loan on a low doc loan while other will allow you to consolidate debts, such as credit card debts and personal loans onto the account. While some lenders may not let you do this straight away, you may be able to do this in the future.
If my partner is a PAYG employee can you still get a low doc loan?
If your partner is a PAYG employee you should ask whether you will still be allowed to get a low doc home loan. However, as most low doc home loans will attract a high interest rate you may want to ask your provider if your partner is allowed to get a standard loan with you as a co-borrower as you will save money on the interest rate.
What proof on income do you need?
Most low doc home loans will require you to provide past tax returns to prove that your income is enough to pay off the loan. Be sure to know what proof of income will be required for the loan so you can be sure that you can obtain these documents.
How long do I need to have had an ABN number for?
Most low doc home loans will require you to have an active ABN for a minimum of two years. Be sure to know how long the ABN will need to be active for you to be eligible for the loan.
Am I limited to buying in particular areas?
Some low doc home loan will not let you buy in particular areas. These areas will usually be deemed to be high risk areas that attract a high price tag. This requirement is used to limit the banks risk with low doc lenders. Be sure that you know what areas may be off limits so you don’t waste any money or time.
Can I give tax returns to hopefully move to a full doc loan later?
Many low doc home loans will allow you to move to a full doc home loan after a period of time assuming you have made all the repayments and that you provide your tax returns as proof of income. Be sure that your lender will allow you to do this as you will be able to save money throughout the life of the loan.
Can I receive discounts later in the loan?
Some lenders will let you receive discounts for paying off the loan when required. This will usually come in the form of a reduced interest rate. Target these types of low doc loans as these loans will save you money.
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