With the increasing importance and popularity of Low Doc Loans in
Australia, it is obvious for the low doc loan market to be competitive.
This competition has led to the availability of various options in this
field.
Low Doc Loans are flexible and comes in many types that you can choose
from. Mainly it can be divided in three types as self-declared income,
account statement and asset lend on the basis of the documents provided.
These loans come with somewhat different criteria to get the loan.
Self declared income - This kind of low document loan involves only
a document about your income that is a signed and acts as a declaration
about your income. No other documents are required. 80% of the security
kept can be loaned and the rate of interest is higher than a standard
loan.
Account statement - To get an Account Statement low document
loan, you have to produce a letter from your accountant as an evidence
of your income. The interest rate is higher than that of a standard home
loan.
Asset lend - As the name suggests, Asset Lend loan is purely
secured against the value of the property. No proof of income or signed
declaration needs to be provided in most cases. The loan allows you to
borrow a lower percentage of the security than in other loans.
Apart from these kinds, you can also find other types and varieties
of low doc loans. You can get different rates of interest from different
lenders and a substantial amount of shopping is required before you go
for any kind of loan.
Basic low doc loan
Basic Low Doc loans are loans, which you can get amounting to
$100,000 and still get discount on rates. You should find out the lender
who are giving discounts then choose those. You may be charged with
additional charges for the facilities provided. The basic low doc loans
generally provide additional repayments and redraw facilities.
Professional package low doc loan
For an amount above $250,000, the lenders may provide you with
wonderful packages as professional discounts. With an annual fee, you
get many additional discounts on banking products under these
Professional Packages. Along with the packages you get free of cost,
some additional facilities like 100% offset account, cheque account and
credit card. To know the exact package for you, you should meet a
mortgage broker who can give you the exact quote from several lenders to
get you the best rate discount and no application fee.
Fixed rate low doc loan
If you want to lock a rate of interest that you want to pay for the
rest of the loan tenure, then you can lock it for several years for 3
years, 5 years or even 15 years. This is called a fixed rate loan.
However, the rates vary largely between banks. Either a good mortgage
broker or shopping around is a must before taking the loan.
Line of credit low doc loan
This is a very convenient option as the loan account for a Line of
credit low doc loan is allowed to be used as a normal account. Some of
the facilities that are attached to any account are withdrawal of funds
directly from an ATM, writing cheques, linking the loan to your credit
card and paying your bills with internet banking, which are available in
the loan account for Line of credit low doc loans.
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