05 October 2011
Low Document Mortgage Loan Approval
Documents seem to be confusing and time consuming. Ask any home loan borrower and they will have the confused look regarding the documents required and collecting of all these together. With this if you do not have a regular salary proof and salary slip, that is if your are self employed or working part time or new and get salary in cash then it is more confusing to prove your self for applying for a home loan.
Mortgage loans are easily approved if you can prove your assets and bank statements along with your income tax returns and this is considered sufficient proof to get your home loan approved. Since these loans are a higher risk for lending institutions they will be critical in approval of such loans. Such low document home loans may come at a higher rate of interest though this is not a rule and you may get lenders who are also willing to offer loans at the same low rate of interest.
The property you are mortgaging must be of a higher value and also have adequate insurance cover. Usually many lenders to be on safe side will approve a loan amount of 60% if you do not have all documents in place. But there are special lenders and private agents who can get you quick loan approval from housing finance companies. But try this at your own risk as private lenders though offer larger amounts as loans without any documents they will also have no rules in case of default in repayments and delayed payments of EMIs.
Sometimes when you have fewer documents then the lenders may also offer you loans at a higher rate of interest and for a smaller repayment period. They may also consider having a higher deposit amount 20% of the purchasing amount before approval of your loan. Apply for a reasonable loan amount according to your monthly income if you wish to get it approved easily. Not more than 80% will be approved and there are some finance companies who also allow loans of more than 95% in special cases strong financial backgrounds of borrowers.