This is where a product called a "low doc" or "no doc" loan can help out.
The downside to these loans is that they can cost you from half a percent to over a full percentage point more than you would pay on a standard loan. But the appeal of such loans is that you need not provide detailed financial information.
Also - more people are opting for low doc loans for speed of processing and privacy concerns. When you apply for a mortgage, lenders want to know everything about you--how much you make, how much you spend, how much you have in the bank, how much you borrow, how much you owe, how much you own and usually your tax returns as well. A low doc loan reduces a lot of the paper work requirements which can be appealing to some people.
What borrowers will need instead of detailed documents are usually a solid downpayment, excellent credit history and to make a good impression on the loans officer. With less documentation to rely upon, lenders must base their risk decision on the instinct and experience.
Additionally, a low doc loan may require a letter from your bank verifying assets and showing your capacity to make regular repayments. Past pay slips or other evidence of income will likely be required and an excellent credit history is a must.
Is a No doc or Low Doc loan for you? If you have an excellent credit history, want to expedite the process, or have an aversion to strangers looking through your finances, this might be a type of loan to consider.
KB: Q0011
Last Updated: 26 Sep 2006
