No Doc Loans - A No-Doc loan allows the borrower to apply for a loan and not have to state their income, employment, assets or even submit bank statements. This type of loan is often time appealing to Self-employed, single women who do not have the required two year track record and many successful entrepreneurs who simply don’t want to reveal how much they make. In doing a No-Doc loan the borrower will have a one percent higher rate on average than most conventional loans.These loans are based on the value of your home and your credit report. Interest only options are available including the 30 year fixed rate programs.
No Doc Loans are also called No Income No Asset. They are not the same as Stated Income, Verified Asset or Stated Income, Stated Asset.
No doc loans are often confused with stated income loans but there is a difference. In a stated income loan the method of earning income must be proven but the borrower is allowed to simply state the amount of that income without providing any proof. A no doc loan means that no documentation at all regarding the amount or the method of earning the income is required.
Great loans for people who have lost their job or in a case where the amount of stated income would seem unreasonable.
No Doc programs are available on loans as great as $1 Mil to 100%
In some cases a lenders guidelines for a no doc loan even waive the need for a full appraisal, or the requirement that the borrower have the property for at least 12 months before refinancing. This is a useful program for investment property owners who need to draw cash out of the equity of a property that was rehabilitated. Most lenders will not use the new appraised value with out additional documentation and "seasoning" of the property for at least 6 months and usually 12 months.
Individuals who live off of equity and debt investments very often have no means of verifying employment or income due to a variety of factors, and are excellent candidates for no-docs / NINA type loans.
No doc loans are much easier to process than the normal loans. There is very little paper work in comparison and not much to verify.
There are lenders offering 100% no-doc loans, but to qualify you must have excellent credit and reserves. Often times this is limited to borrowers who have owned property in the past.
Past credit history and credit score is very important when applying for a no documentation loan since the lending decision is based on extremely limited information.
A NO-DOC loan is good for borrowers who just relocated, or have recently become self employed.
A No Doc Loan means that you do not have to state your income, employment, or assets. The lender's main criteria for approval are your credit history and the equity in the property. These loans are available with as little as 5% equity or down payment! A No Doc Loan is great for those who have lost
their jobs, recently retired, and newly self-employed people, among others
No doc loans are ideal for people who have changed careers or have income that is then being unreported.
No Doc loans require the least documentation and are for buyers with good credit. The buyer provides minimal information and the lender does the rest. No Doc loans are great for people who want maximum privacy.
NO doc loans are not a opportunity to lie about your income to obtain a more exspensive house then you can acctually afford.You are responsible for providing an accurate figure when the loan officer ask's for your income amount. The loan officer should not coach you or fill in the amount for you. If the loan is audited and fraud is discovered you and or the loan officer can be held accountable under the law.
In a soft real estate market, homeowners with no equity in the homes are much more like to default on their mortgages. Because of the intrinsic risk of default associated with No Documentation Loans, most lenders require that the home buyer commit a bigger down payment towards the property.
The first time homebuyer needs to be careful on payment shock. For example- the borrower has been paying $1000 as his rent. The lender usually doesn't want to see the borrower making more than $1500 as his/her mortgage payment (50% payment shock). Unless the broker could present some compensating factor, the lender has a limit on how much payment shock the borrower should face.
No doc program for a first time home buyer is available as well. However, the first time home buyer is required to produce a legitimate verification of rent for past 12 months with no lates. The lender wants to make sure that if the borrower is a responsible on house payment.
