A low doc commercial loan is a loan which is given out based on a mortgage. But what is an additional benefit in this is that it requires very less documentation which comes as a relief for people who are in need of a loan but do not have proper documentation to back it. And the person who wants this loan needs to have a good credit score to show for it. Along with that, he must have an income which is good so that he can repay the loan later on.
While looking for a low doc commercial loan, the person who wants it need not necessarily have to have the same level of documents or the same amount of assets and documents to show to get the loan approved. This is unlike traditional loans.
Understanding In Depth Low Doc Commercial Loans
You may be a fan of low doc commercial loans and even then, you are rightly justified in being so. This is because these loans are much simpler than traditional loans where you need to go through a lot of hassles. You need fewer financial statements and statements for assets and declarations.
To qualify for a low doc commercial loan, you need to have a good and stable income and a good credit score. You automatically qualify for the loan. Another very simple criterion that you must meet for this loan is holding a job for a minimum of one year. If you match all of these criteria, you may always apply for a loan as long as you consult a professional for the best and most accurate advise.
Although low doc commercial loans are low on documentation, they need quite a good number of criteria that you must meet. Another such criterion is having 20% more income than the monthly installment that you must pay as a loan mortgage. If you can prove all these you are now ready for your loan.
The Benefits Associated with Low Doc Commercial Loans
The primary benefit that you can derive from this loan is the provision of fewer papers and documents to be eligible for a low doc commercial loan. And if you are a businessman, then you are over eligible for it because your business is proof that you will be able to repay the loan later on. Your sufficient income is enough to get you hold over this loan.
Another benefit of low doc commercial loans is the reduced approval time. Many other variables help you secure a loan faster. It is determined by your employment status, annual income, and credit score. You profit greatly since you need less documentation.
Another of the benefits associated with low doc commercial loans is their flexibility. If you do not have the income to show for then you can secure the loan in the name of a family member or a friend who has a stable income. Even if your income is variable over the course of a year and fluctuates, then also you can apply for a loan.
Methods of Loan Application
The mortgage market is becoming more and more difficult and competitive by the day. And getting a loan is also becoming difficult. So, if you are looking for a low doc commercial loan, then here is how you can apply for it:
Your property will become security for your loan
This property that you are mortgaging can either be new or it can be mortgaged another of your existing properties that are already mortgaged
If there is more than one applicant for the loan, then one of them must have a permanent job for at least three years
Documents Required for This Loan
Certain documents are required for this loan. These docs include:
A letter from an accountant
BAS statement
Your rental history or a copy of the lease agreement
Statement of accounts in banks
Some instances are experienced where no income evidence is required
Details of your GST registration
Self-verification in the form of a declaration of your income
The registered business names
The Properties Which Are Accepted for This Loan
Having special properties are not a requirement. They can be ordinary commercial or residential properties. You can show properties like shop fronts, retail shops, warehouses, and factories and in the case of residential properties, they can be homes, apartments, etc. You automatically are eligible to get a low doc commercial loan.
Conclusion!
Before closing it is worthwhile noting that you must be extremely careful while securing a low doc commercial loan. You have to find the right lender and what he is looking for. And if you have some savings then you are all the more eligible for the loan.