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NAB Aim High With Low Doc Home Loans
National Bank
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Low Doc home loans are often viewed as a quick and easy way of cutting through the paperwork associated with home loan applications. Applicants go through the normal home loan application process, with the difference being that all the documentation required to show proof of income is a signed declaration. It's called a 'Low Doc' process.
This type of loan can be advantageous for borrowers who are contractors, self employed or have a small business, i.e. borrowers with income and assets but don't always have the necessary paperwork to qualify for a standard home loan. National Australia Bank offer a number of Low Doc products. The NAB Tailored Home Loan with a variable rate includes a 100% offset option, redraw and additional repayments facility. The downside of this product is the minimum redraw amount of $2000. So depending on the way it gets used, the 100% offset option where the loan is linked to transaction accounts may not be such a great feature.
Another of NAB's Low Doc loans, the Tailored Home Loan Fixed Rate, offers the convenience of low paperwork, but at a cost. For example, additional repayments are limited to $20,000 during the period of fixed interest, and additional payments beyond this limit will attract penalties. Like its variable rate cousin, the redraw minimum for this loan is also $2000.
NAB offer their Low Doc loan products to self-employed borrowers who have a good credit history and a current ABN. These loans can be used for residential property and personal investments, but are not suitable for borrowers who want to build.
Generally, having less documentation usually equates to increased risk for lenders, so many Low Doc products offer fewer features and stricter limitations than standard loans. Most Low Doc loans also require lenders mortgage insurance which can add to the cost considerably.
Before applying for a Low Doc home loan, be sure you understand the term of your loan. Find out the details of any special features offered, and look into the fine print to learn about any limitations that a Low Doc home loan may put on your financial future.
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