No Doc Loans

Posted: 2023-09-08 | Author: Richard Simon

---

Traditional mortgages have strict lending requirements. What happens if you do not have traditional documents to verify your income? No doc mortgage loans help borrowers that have non-standard income become homeowners or allow them to refinance existing mortgages. This loan type is considered Non-QM (Non-Qualified Mortgage) and can be a great option for individuals who are self-employed, business owners, retirees or even investors.

The term 'no doc' loan can be a bit misleading as documentation is still required. The documentation required will be alternative and sometimes less than your traditional mortgage, however. For example, you may end up providing bank statements in lieu of paystubs, W2s and tax returns.

What are some non-standard income scenarios that might apply?

• Irregular Income: Traditional lenders will require you to have a consistent or regular income. If you own a small business or are self-employed in an industry that drastically fluctuates in earnings throughout the year, a no doc loan may be able to qualify you based on your total annual earnings through bank statements and/or profit and loss statements and balance sheets for your business.
• Real Estate Investors: Investors may qualify for a no doc loan using the value of the properties they own instead of documenting personal earnings. If you are purchasing an investment property, the rental income you expect from the purchase can be a factor in the loan qualification.
• Net Worth: Individuals who are not employed through a company or with their own business but have a high net worth may qualify for a no doc loan by documenting their net worth can sustain the new loan payments and will remain stable for the duration of the loan.

While no doc loans do provide options to borrowers with unique income situations, they are considered high risk borrowers for the lender and will need to meet certain parameters to qualify outside of the alternative income documentation. These parameters can include but may not be limited to a minimum credit score, debt-to-income ratios, liquid assets, reserves, and down payment amounts.

To learn more about no doc loans and if this is the right option for you, Contact us and speak with one of our Loan Originators

ID: 28DD2C7955CE926456240B2FF0100BDE