What is a No Documentation Loan?
Depending on the lender you might need to show some evidence of the income, like your bank statement, which, in case you are self-employed, better reflects your cash flow than a tax return. No doc loans are riskier for lenders that is why you may have a higher interest rate and down payment with this type of mortgage loan.
No Doc Mortgage Loans Have Obvious Benefits
- Require less documentation and have linear guidelines
- Available to self-employed and foreign nationals who don’t need to show their tax returns
- Competitive rates and terms to match your affordability.
What Are Stated Income Loans?
A stated income loan is a mortgage where the lender does not verify the borrower’s income by looking at their pay stubs, W-2 forms, income tax returns, or other records. Instead, borrowers could show bank statements. Stated income loan is good for those who don’t want to provide W2 or other IRS records.
How Do Stated Income Loans Work?
Self-employed may find it challenging to qualify for traditional mortgages due to their variable income and stricter documentation requirements from lenders. Stated income loans help borrowers where fully documented loans normally would not consider the source of income as being reliable and stable. If you don’t have to pay stubs due to self-employment and other situations, a stated income loan will not require them.
Naturally, stated income loans are riskier for lenders, so you need a down payment of at least 10% or 25%, in some cases – up to 35-40%. It will make a good impression on the lender and will proof that you have finances to pay the loan. If you have a bad credit history, you should give us a call so we can find the best option for your future loan.
How Do Stated Income Loans Work?
Getting a mortgage loan with very little documentation is a real option nowadays and it has its own great benefits. There are several options if you want to apply for a no income verification mortgage loan. Lenders will require the next documentation:
- Limited Doc for W2 & Self-Employed Borrowers: Qualify with Employment Letter OR P&L.
- Asset Based Loan Programs: Qualification based on verified liquid assets.
- 12 to 24 Months Bank Statements: Most lenders require this type of loan lender to need 12 or 24-month bank statements to verify the income. Qualify with 100% deposits for personal statements or 50% for business accounts.
- No Income Doc Program for Investment Properties: Qualify with Rental Income.
