If you’ve ever wanted to buy a home, but have been shut out of traditional financing options due to your credit history, a lo doc loan might be right for you. Lo doc home loans is a type of mortgage that allows borrowers with bad or no credit history to qualify for an FHA-insured loan, which means they can get access to low interest rates and lower monthly payments than they would with a conventional mortgage. But are lo doc loans right for everyone?
What makes them different from traditional loans? How do I know if they’re worth it? Let’s break down all your questions about these unique products so you can decide whether or not they’re right for you!
What is a lo doc home loan?
A lo doc home loan is a type of mortgage that requires less paperwork than a traditional mortgage. The term “lo doc” comes from the fact that these loans allow you to skip over some of the documentation requirements used in conventional mortgages.
Loans can be either full or partial lo docs, depending on how much information is required from you by your lender. Full lo docs require no income verification, while partial loans still require some verification with regard to your income and expenses.
How to qualify for a lo doc home loan.
To qualify for lo doc home loans, you need to meet all the requirements listed above. You also have to have had at least one year of steady employment and be able to put down 20% of your home’s purchase price in cash. Additionally, your credit score needs to be at least 640 (this is considered good). If it falls below that number but is still considered “good,” then lenders may allow you some extra time before making payments on your loan in order to build up equity in your home and improve their chances of getting paid back when it’s sold later on.
Loans with lower down payments are risky because they rely more heavily on borrowers’ ability–and willingness–to pay back their debts than traditional loans do; if they default on those debts or otherwise fail financially (such as losing their job), there won’t be much left over after paying off creditors like banks or investors who hold these types of securities (i..e stocks).
What are the benefits of a lo doc home loan?
A lo doc home loan is a mortgage that requires no income verification, asset verification, credit score or PMI. It also doesn’t require an appraisal or flood certification. This means you can get approved for a home loan without having to go through the hassle of proving your income and assets.
This is beneficial for both buyers and sellers because it makes the process much faster and easier than with traditional lenders who require these steps in order to approve loans.
Conclusion
If you’re in the market for a lo doc home loans, it’s important to understand all of your options. A lo doc home loan can be a great option for those who have less than perfect credit or a low down payment, but there are also some downsides to consider before applying.
For example, these loans often come with higher interest rates and fees than traditional loans do. If you’re interested in learning more about how these loans work or how they could potentially benefit your situation then contact us today!