The concept of low doc property finance is becoming more and more popular with each day. If you are not sure about taking this kind of credit or are not aware of how the low doc loans are helping people, do not worry further. There is no paperwork involved in this type of finance, so the borrower goes through a hassle-free process.
In addition, just to make you more aware, we will also discuss the risks of such low document credits.
Benefits of taking a low doc finance loan
Since we are focusing on the benefits of having the low doc property finance, we will first discuss them. It will give you the clarification that you need to believe how advantageous the low documentation credits are.
- Ideal for investors and self-employed people
It is very difficult for the investors and the self-employed people to get credits from the banks or other financial centers. This can put a stop in their business plan. However, with the introduction of the low doc loan plans, one can have the credit needed to get the business up and running. There is no need to show employment details for getting the approval. But yes, you must have an ABN document or the GST registration number. Also, you must be a taxpayer in case you want no hassle for the approval of a low doc loan.
- No need to have higher credit score
Credit score is a number which is awarded to every credit owner. It can cause problems in the loan approval since the banks always check the credit score before granting the request. However, when you are applying for the low doc property finance, you won’t have to worry about the credit points. There are wide options of low doc finance available which one can compare and choose. There might be a case of traditional mortgage but that can be discussed with the loan professional only.
- Plans can be customized as per convenience
One of the major benefits of having the low doc loans is that you can customize the loan plans as per your convenience. Be it the repayment duration, the way in which you want the credit, the repayment methods, or anything else, you will have multiple options to choose from. This will reduce your difficulties at the time of repaying the loan to the creditor.
- Different interest rates are available
Another advantage of getting the low doc property finance is the availability of two different interest rate types. If you are not satisfied with the flat rate method, you can opt for flexible interest rates. In this, the rates will decrease as you will continue to pay off the loan amount. The commercial broker or the loan professional can check the existing interest rates and guide you about which one will be the most suitable for you.
- Early and easy loan approval
Lastly, the low doc loans can get approved early. Since minimal documents are required, the creditor won’t have to process multiple verification procedures. And hence, these loans can get approved within a few days of request submission.
Risks involved with a low doc property loan
The risks involved with low doc property finance are as follows:
- Increasing number of scams and frauds
- Refinancing when not necessary
- Higher interest rates
- Lower repayment terms
Getting early finances for buying a property is not easy. You have to go through a lot of procedures, starting with getting an income statement from your employer to having a high credit score. Low doc property finance helps a lot in saving small businesses, especially those which are hard hit by the pandemic or due to any major monetary loss.