A no doc mortgage loan is a viable choice for potential buyers who have built successful income streams but who may prefer to avoid the time-consuming process of documenting each income source. This type of loan is an option for buyers who are able to afford a significant down payment on the homes they decide to buy. Privacy and discretion are additional benefits to this no doc home loan.
This type of home loan has three main sub-fields: a stated-income loan, a no-ratio mortgage, and a no-income no-assets (NINA) loan. Depending on a loan applicant’s specific source of income, one of these categories may be the best fit. Buyers who earn the bulk of their income from tips or commission payments are generally the best candidates for a stated-income loan.
No-ratio mortgages are available to buyers who have no means of providing documentation of a debt-to-income ratio. This situation could be due to income fluctuations or to wide disbursements of investment funds. The latter often applies to various business owners whose related information would be more expensive to gather than is financially practical. Lenders consider the overall return on investment before extending an offer for this type of loan.
A NINA loan is an alternative that requires the least amount of financial information. Buyers who opt for a NINA mortgage generally need to provide the largest deposit amount for the home as well as documentation of the ability to make future payments. Lenders offering a NINA loan also carefully examine credit ratings as part of the criteria for approval.
Options for a no doc mortgage loan is available to home buyers who have been financially prudent with both their income streams and savings. Since these loans carry more risk for the lending companies offering them, large upfront deposits and proof of long-term financial health are the keys to loan approval for buyers who wish to maintain a certain level of discretion when it comes to their income and investment information.
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