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Apples and Pears – the difference between Lo-Doc and Non-Conforming Loans

Our financial circumstances are as different as we are!

Lo-Doc and Non-conforming loans are just two of the loans available that reflect some of the changing needs of homeowners and are primarily targeted at the self-employed and investors.

Recent marketing of Lo-Doc and Non-Confirming loans in the media has made them look like one and the same, so I thought I would take a moment to point out a few key points about the differences, as they might just save you money!

Non-Conforming loans are targeted at borrowers who are credit impaired or have an unstable income. They usually attract a higher interest rate than standard variable loans, as well as higher loan establishment costs because of the higher risk incurred by the lender.

The Non-Conforming loan checklist:

• Non-Conforming loans appeal to borrowers looking to consolidate a large number of non-mortgage related debt, typically credit or store cards.
• Non-Conforming loans can cater for borrowers with a less than perfect credit history.
• There are no lenders' mortgage insurance requirements.
• Non-Conforming loans have slightly higher establishment fees and interest rates.

In contrast, Lo-Doc p rod ucts often have lower interest rates and establishment costs attached to them, rewarding borrowers with good credit history. Many borrowers are not aware that there can be considerable differences in the interest rate or that they can save on the loan establishment fees if they have a clear credit history. Certainly worth knowing as some borrowers believe that a Non-Conforming loan is their only option - it's not!

The Lo-Doc loan Checklist:

• Lo-Doc exit fees are generally lower than Non-Conforming loans.
• Borrowers can demonstrate they have a clear credit history.
• If you are self-employed or an investor, you most likely only need to complete an income declaration form rather than provide proof of income.

For further information please contact Mike Lloyd at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it

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