Low-doc home loans get their name from requiring less supporting documentation compared to other home loans. In other words, you can apply for a low-documentation loan without providing the same kind of paperwork as a more traditional full-doc loan. Because you often use alternative paperwork to apply for these loans, they are sometimes also known as alt-doc loans.
For borrowers who are self-employed, those who freelance or own their own small business, getting access to payslips, PAYG payment summaries and group certificates can be challenging. The lack of traditional documentation can also make applying for a standard home loan a little trickier. That’s where a low-doc home loan comes in, giving non-traditional borrowers access to home loans minus the usual documentation.
Until low-doc home loans came along, getting access to a mortgage was difficult for non-traditional borrowers. What low-doc loans do is provide self-employed Australians, freelancers and small business owners with the ability to provide different kinds of proof of income documentation when applying for a home loan.