low-doc loan

low-doc loan

English

Alternative forms

• low doc loan

Etymology

From low + doc + loan.

Pronunciation

• Audio (AU)

  (file)

Noun

low-doc loan (plural low-doc loans)

1. (US, Australia, banking, finance) A loan or mortgage where the borrower provides only limited proof of their income.
   • 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.”

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

     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.

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

     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.

Coordinate terms

• no-doc loan

See also

• subprime