Who Are Low Doc Loans Intended For?

Getting a loan usually involves a lot of paperwork, including tax returns, statements from multiple accounts, providing paystubs, and much more. When your mortgage broker or lender puts you up to the task, that means he’s trying to get you the best mortgage he possibly can for you. However, a lot of people do not have the required documents. For them, lo doc loans are a very appealing option, since they’re available with almost no documentation.


Lo doc loans are appealing for self employed people who prefer to show lower income due to paying lower tax purposes, however, this certainly backfires when applying for traditional loans. For young workers who have no wage history or low wages, as well as for new business owners who don’t have consistent earnings – organizing and finding documentation to get lo doc loans is quite difficult, if not impossible.

Unluckily for most, the days of easily acquiring low documentation are over. Before the economic crisis that peaked in 2008, you could have just told your loaner or mortgage broker how much you earn, and you’d need very little proof to get a loan. However, stated income is no longer freely available and only some lenders are willing to work in this mortgage area.

Most loaners are not looking to go back to 2005, as they aren’t interested in issuing subprime loans using wrong numbers. However, they are interested in working with people who can provide some proof that they have the ability to repay their loans despite lacking the documentation to prove their assets and income in traditional formats. Having some of the characteristics listed below will certainly help you qualify for a low documentation loan.

Assets and Income

Having plenty of backup money and a steady income will always be helpful. You can use investment accounts and large banks as reserves to tip into to keep up with payments. Moreover, if you can make your case to a lender or mortgage broker, even though you don’t provide documentation, you still might get your loan approved. Mortgage brokers are much more lenient about income if you have strong assets.


Good credit will settle for less information if you have a good credit score. That being said, if everything else is good, there are very few things that could ruin the deal for you. By having a good credit, lenders see a lower risk for giving you a loan. However, you have to keep in mind that when making larger down payments, you have a better chance with low documentation lenders.