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articles: Low Doc is Big Business

• Low Documentation Home Loans are a growing business in Australia. In fact just over $8billion in Low Doc Loans were written during 2006. Low Doc Home Loans were designed for self-employed or those with irregular income. Today, such loans make up around 7% of the Australian home loan market. With low-doc loans, borrowers are able to self-certify their income in the home loan application process. This is especially convenient if your tax returns are not up-to-date at the time of the home loan application. When you apply for a low doc loan you are required to sign a declaration that states your annual income and ability to afford the loan, instead of providing tax returns with your application.

  Global financial markets have in recent months been seriously affected by a dramatic rise in sub-prime loan failures. Sub-prime lenders fund low doc and bad credit home loans. In the US, these lenders have been significantly more relaxed in their lending practices. This has contributed to a large number of home loan defaults.

  
  
  
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