Low doc home loans basically require less documents to support your home loan application.  This type of home loan product is especially useful to self-employed and casual workers, who typically may struggle to provide enough evidence of income.  Previously, self-employed workers have found getting a mortgage very difficult because of this.  Low-doc home loans provide an opportunity for purchasing property.

To approve the loan, a lender will require you will need to sign a declaration stating your income and in some circumstances you may need to provide a statement from your accountant. 

These loans usually have a higher interest rate than normal, although the more financial documentation you can provide, the lower the rate may be.  You also may need a higher deposit, up to 20% of the value of the property.  The lender will also charge mortgage insurance, and they may look for other assets to secure the loan, such as a car or other investments.  With all these extra costs it is important to consider a low doc loan very carefully.  Often, the loan period is shorter, and you will need to refinance after the initial term.

Although low doc loans have many benefits, there are also many other things to consider.  The higher fees and charges can be more than some people can afford so it is important that you look at all the options and decide whether this loan is for you.