If you want to get a home loan, it is usually considered necessary to provide proper evidence of the income. Do you find it difficult to provide the proper documents? It's time you keep your worries aside. You can now, as a borrower who is self-employed, easily get a low doc construction loan. Being self-employed can often cause troubles while having to provide a standard proof to justify the income of the person. This is an essential part of the process of application of the loan.
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| Low Doc Construction Loans |
Without the property documents, one may not stand eligible to apply for the process. These types of loans give the opportunity to people who don’t have all documents such as proof of income to take loan to construct a residential building. You can use other documents to prove your income like business activity statement and bank account statement of last 6 months.
In today’s competitive housing market no doc or low doc construction loans are very popular due to their increasing demand by middle class families. Nowadays banks and other financial institutions are launching new loans which need no mortgage or required very less document. In this article, you will read about the features of the low doc construction loans.
What Are the Features of Low Doc Construction Loans
Given below are the features of the low doc construction loans. Read on to find out.
- They Cater To A Large Number Of Needs: The low doc construction loans can cater an exorbitant number of needs. This loan can be used to fund renovations, promote constructions and also buy a package of land from any licensed buyer.
- They Have Minimal Interests: When the construction is under process, a person only has to pay the interest on the progress draws which are to be paid to the builder in installments. After the construction procedure is complete, he can pay the principal amount and the interests.
- The Funds Will Be Made Available In The Form Of Progress Draws: There are mainly six stages namely Preparation, the Slab, the Frame, the Lock Up, the Fit Out and finally the Completion.
- A Large Number of Lenders Offer Them: These loans can be borrowed from smaller banks, lenders who are non-bankers and also credit unions. You don't always have to go to a bank for this purpose.
- They Have A High-Interest Rate: These loans may have a higher rate of interest which is higher than normal. They also have a comparatively higher fee.
- They Are Much More Flexible As Compared To The Conventional Home Loans: It is not necessary to prove the income by presenting various pieces of evidence. A declaration with the income and the ability to repay stated properly will work just fine.
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| Low Doc Construction Loans |
Formalities to Fulfill
One needs to provide the following information while applying for a low doc construction loan.
- You will have to provide your personal details wiz your full name and the contact details.
- You have to state the loan amount and the purpose for which you are borrowing the money.
- You will have to present a signed declaration stating your income.
If you meet the criteria required to be eligible for issuing a loan, you have to fulfill the following formalities and watch your dream come true!
Conclusion
A low doc construction loan makes borrowing money easy for the applicants of the home loan who are self-employed. The applicants can borrow the money without having to provide any standard proof of their income. This low doc construction loan applies to be used when one desires to build a new residence.
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