Shopping for a low doc loan isn’t as difficult as it sounds. Unfortunately, you can make a lot of mistakes in the process. For instance, you don’t look at the interest rates or have a clue about your monthly repayments. These mistakes are silly to make, but there are a few others that top the bill. So, what top 3 mistakes should you avoid when searching for a low documentation loan?
Not Researching the Lender
Few people think they need to check out the lender. Of course, it seems silly because they’re in business. Unfortunately, that doesn’t make them trustworthy or reliable. Some lenders have better track records than others (for whatever reason) and it’s important you can trust the one you choose. So, take a few minutes to do some research on the lender. Find out if their low doc loans are highly rated or otherwise.
Not Reading the Loan Terms and Conditioning
This is one of the biggest mistakes borrowers make and it happens all too often. Few read the terms and conditions of the loan. It’s not as uncommon as you think. After all, the terms and conditions seem to go on forever (with some jargon thrown in for good measure). However, it’s a major mistake not reading them when applying for a low doc loan.
The terms and conditions specify how a loan is to be repaid and what if any, fees there are for early repayment. There is a lot of information contained within these facts and it could make or break your loan. Some conditions might leave you a bit concerned, so you have the option of checking them out with a lender (or third-party financial adviser). Not reading the terms until after you have a low doc loan is a disaster waiting to happen.
Borrowing More than Necessary
As strange as it sounds, some borrowers actually go above and beyond what they need. It means they are left with a larger loan that wasn’t necessary in the first place. This is a mistake you want to avoid because it could spell disaster. For example, you look at low doc loans. You need to borrow $4,250 but you apply for a loan of $5,000. The extra $750 seems trivial but it can make a huge difference when it comes to repaying the loan. Click here to read about Can You Get Low Doc Home Loans When Your Credit is Poor?
It’s money you didn’t need in the first place and now are paying back with interest. It really is a major mistake to make. It’s the same when you’re looking at a low doc home loan. You put down a 25% deposit when you could have put down 35%. It’s an extra 10% you didn’t have to borrow. When you’re looking for a low doc loan, borrow only what you need and nothing more. It’ll save you money in the greater scheme of things. Visit https://www.qld.gov.au/housing/buying-owning-home/financial-help-concessions to read about Financial help and concessions.
Be a Smart Borrower
It’s crucial to avoid mistakes such as trusting the first lender you see, borrowing more than necessary, and not reading the terms and conditions. These mistakes can be very costly to you because they could result in you choosing the wrong loan. Bad loans make your financial situation worse and it’s not what you need. Instead, take a moment to research the lender, read the terms and conditions, and borrow only what you need. Low doc loans are far less scary than you think.