When it comes to obtaining a mortgage, there are a variety of options available to borrowers. No Doc and Low Doc Mortgages are two types of mortgages that are designed for people who have difficulty providing traditional documentation of their income.
No Doc Mortgages
No Doc Mortgage, also known as "Stated Income Loans," are designed for self-employed and freelancers who have difficulty proving their income. These loans require minimal documentation, with borrowers only having to state their income and provide some bank statements to prove their ability to repay the loan. However, these loans often come with higher interest rates and fees due to the increased risk to lenders.
Low Doc Mortgages
Low Doc Mortgages, on the other hand, require more documentation than No Doc Mortgages but less documentation than traditional mortgages. These loans are designed for borrowers who have a regular income but have difficulty providing traditional documentation, such as tax returns and pay stubs. Low Doc Mortgages require borrowers to provide bank statements, proof of employment, and sometimes a letter from their accountant or financial advisor.
Conclusion
No Doc and Low Doc Mortgages are two types of mortgages designed for borrowers who have difficulty providing traditional documentation of their income. While they are similar in some ways, there are significant differences between them that borrowers should understand before deciding which one to apply for.