Low Document Loans

Are you an entrepreneur? Does your income come from a source other than a 40-hour a week job? Do you have trouble convincing a stuffy, traditionalist bank that you are a good credit risk because you don’t fit into the pigeon-holes that they have set up for their one-size-fits-all home loans?

If that describes you, you’re not alone. Every day more and more people are shunning the 9 – 5 work routine in favor of a more entrepreneurial lifestyle. The problem is that the traditional, stuff-shirt institution-type folks often just don’t get it. They want expect everyone to be the same.

If you march to the sound of a different drummer then you’ll be pleased to hear that Washington Mutual has introduced what they call their low documentation loan. What this means is that they are able to make home loans to people who do not have all of the standard documentation to prove that they are a good loan risk.

The low document loan has fewer financial requirements and greatly reduced paperwork. There are fewer steps required to get a loan approval.

Some of the advantages of the low documentation loan are that you do not have to prove an income and you only have to prove minimum assets. You are not required to reveal as much personal information about yourself or the source of your finances. There is also a lot less paperwork and a lot less hassle.

These loans are especially useful for people who are retired, or those paid a commission, or many small business owners, and those who are self-employed.

Interest rates on low document loans are slightly higher than on standard loans because the risk to the lender is greater. However, once approved you can apply for an Option Adjustable Rate Loan (an Option ARM) which includes the option of a 40-year loan and provides you with five different payment options each month, including the option to make interest-only payments, or you can choose a standard ARM loan, or you can choose a standard 15-year or 30-year fixed-rate loan.

For those people who do not fit the standard mold, Washington Mutual’s Low Document Loan is like a light at the end of a tunnel.