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Posted by: | Posted on: October 30, 2019

Standard Home Loan vs Low-Doc Home Loan

A low-doc home loan is riskier than a standard home loan. That the interest rate that is offered on any of the low-doc home loans is typically higher than any of the standard variable interest rate home loans.

Some lenders will have a lower house independent doc loans which are only available to those who work alone or meet the criteria for a low doc loan. Other creditors will have a selection of low doc on their standard home loan deals. There are a few differences between a standard home loan and a low-doc home loan and they are:

1.   Low-doc home loans will not require proof of income or proof of tax returns, which is required while taking a standard home loan.

2.   As a borrower, you will be required to only fill a declaration that will confirm your ability to pay back the loan unlike in a standard home loan. This process is called the self-certification process. You can also visit to get more information.

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3.   Low-doc home loans are a more attractive option for the self-employed.

Another major difference between the LVR low doc loans and the full (loan to value) requirements. With a low doc loan maximum loan to value ratio is 80% and anything over 60% LVR mortgage lender will require insurance.

On a standard home loan with a loan, only LVR of 80% or more is required to pay lenders mortgage insurance. The fact of the matter is that you need to carefully consider your options before actually applying for a low-doc home loan.