In the USA Low Doc Loans and No Doc Loans are still available, however they are now much harder to get. Further, like all finance they have been priced according to risk. As the risk of the these types of loans have increased, so have the rates.
The cheapest form of mortgage loan is still a full document loan. However, for people that don’t want to disclose their financial position a Low doc loan may be more suitable.
There are three main types of low doc loans:-
No Doc loan. These loans are based on a larger deposit size and a good credit history. The lender will appraise the property, and do a credit check on the applicant. The less the deposit the higher the rate.
No-ratio loans. A borrower declares all their assets, including real estate, stocks, cash in the bank etc. It is called a No ratio as the lender cannot calculate the debt service ratio as no income has been declared.
Stated-income loans. Normally for self employed. With this type of loan an income, as well as assets and liabilities is declared.