low-doc loan

plural low-doc loans · alternative low doc loan

1. AustraliaUSbankingA loan or mortgage where the borrower provides only limited proof of their income.

   This kind of “no-doc loan” and its cousin, the “low-doc loan,” became quite prevalent. By 2006, low-doc loans accounted for more than one-third of all subprime mortgage originations.

   2011, Robert W. Kolb, The Financial Crisis of Our Time, page 56

   2 more examples

   2006, The Bulletin, Issues 6536-6544, page 61, “You can see it here in mortgages. Low-doc loans used to carry at least 1% or more of risk premium. As everybody [piled] in, that has been driven down to half a percent. These people do not have a verifiable income, and yet you can only expect them to be charged half a percent more on the interest rate.”

   In a no-doc or low-doc loan, the lender doesn′t require you to bring proof of your income, but you will usually have to pay a higher interest rate or extra fees to get the loan. Lenders generally charge more for no-doc/low-doc loans.

   2007, Barry Leonard, Consumer Handbook on Adjustable-Rate Mortgages, page 9