Catches of Low-Doc Home Loans

Low doc home loans are the loans of choice for many self-employed people. This is because they usually have a variable income and cannot really offer undeniable proof of what that is to the lender - who likes to know all the ins and outs of one's income before approving a loan. Lenders also need to see other things such as tax returns and other financial statements. But those who are self-employed often find that they are lagging a fair way behind in doing their bookwork, so cannot provide it. Some lenders require the borrower to fill out an Income Declaration instead of the usual paperwork.

While a low-doc loan can suit many people, there are certainly some risks attached. Often the interest rates will be higher, as will the costs and fees associated with servicing the loan. There may be a lower and upper limit to the amount available. A limit may apply to the time e.g, it may be for 12 months with the option of refinancing after that time.

You may need to offer collateral such as your car and/or other assets - and then if you default you could lose the lot. It's important then to know that you can afford the loan repayments.

Compare home loan fees and variable rate home loan at details online http://www.quickdirect.com.au/Content/Fees.aspx

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