Most people aspire to acquiring a home and become home owners. The relief of being able to purchase your own home at your favourite location is distinct and can’t be compared with anything else. However, it can be daunting for anyone to purchase a home to settle down. Obviously, it’s difficult to save such a huge amount of money to buy a dream home especially for self-employed people on a modest income. Undoubtedly, a few people manage to buy homes outright. But, the ratio is low as the rest of the population depends on the financing facilities from finance companies and market lenders.
This is where low doc loans can come into the picture. They are designed for self-employed people who are running their own business. They can provide amounts to grow their business. These loans are not only designed for business purposes but also for financing home purchases. Loan lending organizations help self-employed people make their dream come true by requiring only a small amount of deposit to fund their home purchase (typically around 20%). They also make it convenient for the self-employed people to repay their loan in easy installments.
Let’s see who qualifies for a low doc loan?
People getting regular income and having well-established businesses are usually eligible for normal loans. But for self-employed people and individuals with incomplete tax returns or complex income streams, they may qualify for a low doc loan to make their lives easier with excellent funding options.
Loan lending organizations grant fund to different professionals including self-employed lawyers, doctors, engineers, MBAs, CAs, Contractors, traders, and others allowing them to opt for a low doc loan over traditional loans.
Key factors to be considered for a low doc loan:
- Income substantiation & repayment capacity
The applicant’s need to be able to substantiate their income if income tax returns are unavailable.
- Applicant’s profile details
This includes the applicant’s name, age, address, qualification details, number of dependants. Lenders may ask for further proof to understand the applicant’s situation and living costs.
- Current financial position
A lender evaluates an applicant’s loan repayment capacity by its current and previous income details. By having a look at their financial details, they will decide whether they are fit for the proposed home or business loan or not.
- Entrepreneurial ability
For business loans, this factor will reveal your capability and skills to generate money from your new venture. If lenders want to know the process of your income, they with investigate the profit criteria of your business.
Applying for a home loan when you’re self-employed with fluctuating income can be difficult. Exploring your low doc home loan options may solve your problems to a great extent. You may get a large amount of funds from a lender who is driven to support low doc loans applicants with minimal verification. If you are also a self-employed business owner looking to buy a home and want to remove the burden of arranging a large amount of deposit, consider applying for a low doc loan.