‘No Doc’ is short for No Documentation and ‘Low Doc’ is short for Low Document. These are two types of home loans that require no verification of your income to get the mortgage or home loans. Other documents, however, will be required to get the loan.
These home loans have been especially designed for people who do not have proper documents to be eligible for loans that are generally available in the market. These loans can be availed by independent contractors, investors, self-employed, ex-bankrupt, credit rating impaired and those who are behind in their present repayments and have not been considered favorably by lenders in the traditional loan market. Also people who do not want to waste time going through all the lengthy process of availing loan from the market even though they have the proper income.
Low Doc Home Loans
This loan has been designed mainly for people that have no updated taxation returns as proof of their income that are generally required to be eligible for traditional loans; and are looking to invest in properties or want to refinance their present property. There are three types of such loan
No Ratio Loans
This loan is given against large assets and good credit and therefore no debt to income ratios is considered in this loan. This loan is best suited for those who do not want their income to be disclosed. Since the collateral against this type of loan is high the income of the borrower has no bearing on the eligibility for the loan. The borrowing process is simple and fast.
No Doc Loan
As the name suggests, getting this type of loan, documentation is the minimum. The lender asks for some basic minimum financial information from the borrower and if the borrower is able to fulfill it, the loan is sanctioned.
Stated Income Loan
This loan is meant for those whose income is not stable. This is a low doc loan and the borrower has to disclose his income which could include tax returns.
Depending upon your situation you can opt for No Doc or Low Doc loan.