Mortgages are not for everyone. No-Doc mortgage loans are for borrowers who have nontraditional income sources. Other lenders denied them because they did not have enough paperwork. Find out more about the history and evolution of no-doc mortgages. Aplusmortgagerates.com is committed to helping the historically marginalized make homeownership possible. Our Community Development loan programs provide a level playing field for people who were previously unable to get a loan approval.
What is No Doc Mortgage’s No documentation loans are mortgages that don’t require any paperwork. Lenders do not need to look at tax documents such as W2s and tax returns, but they can accept bank statements for proof of income. These mortgages, also known as no income verification loans, are a great resource to self employed borrowers. They can accept bank statements as proof of income, as well as tax documents like W2s and tax returns.
What makes a No Doc Mortgage different to a traditional mortgage?
While both have the advantage of getting a home loan, no-doc mortgages offer a few key advantages over conventional loans. Although the loan process isn’t complicated, the down payment and credit scores of borrowers are usually higher than those required for conventional mortgages. Aplusmortgagerates No Ratio loan program requires borrowers to have a minimum credit score 680. The down payment must be at least 25% of the home’s value.
Why is No Doc mortgage still so popular?
Lenders used to extend mortgages to borrowers who couldn’t prove that they could repay the loan. This led to the 2008 financial crisis. Subprime homeowners didn’t want to pay their mortgages during this difficult time due to the loss of work. Federal regulations such as the Dodd-Frank Act were created to ensure that a similar crisis does not occur again. This ended the long period of no-doc mortgages. Only 3% of lenders are allowed to offer low-doc or non-doc mortgages to help those who have been economically excluded. Our mission as a CDFI is to provide home loans to underbanked families and individuals. We go beyond the traditional loan qualification criteria that are associated with income verification such as paystubs or tax returns. We instead consider the borrower’s credit and financial history. For borrowers with good credit histories, we offer different types of loans, including Asset Utilization loans, No Ratio and Lite Doc loans.
Is there a disadvantage to a No Doc mortgage?
There are some drawbacks to No Doc Mortgages. These types of loans may not be offered by all lenders. Because of the financial risk and commitment involved, it might be difficult to find a lender who offers low-doc or no-doc mortgages. Lenders might also call a product a “no doc” loan if it meets less stringent requirements but still requires income. No Doc Mortgages also require that the borrower be creditworthy and have the cash flow to pay down the closing costs and reserve.
Which home buyers would No Doc Mortgages work well for?
There are many potential homeowners for whom No Doc or Low Doc mortgages might be the best option. Our Community Development loans, which are registered in all 50 US states, can be a great option for people who have been rejected by other lenders. These mortgage programs are ideal for borrowers who are:
- Retired
- Investors in real estate with complex incomes deserve simplified underwriting.
- Foreign nationals, immigrants, and minorities may pool or share extended family resources.
- Self-employed borrowers borrow on commission or tips
- Independent contractors with difficult-to-document income sources.
- Recent self-employed owners of businesses have not had a full year of income statements.
- 1099 workers
How do I apply for a mortgage without income verification?
Aplusmortgagerates.com may be the right place for you if you are in one of these homeowner situations. Aplusmortgagerates.com is the mortgage lender for people who have been turned down or denied a mortgage due to inadequate documentation. We also help those with financial backgrounds qualify. To begin your home-buying journey, talk to a mortgage specialist today.
Aplusmortgagerates.com offers No Documentation Loan Programs?
Aplusmortgagerates.com does not offer the traditional “no-doc” mortgage, but we do have loan programs that take into account alternative income documentation. Our Community Development Financial Institution status means that we are able to provide home financing for non-traditional borrowers. We call these Community Development loans. The Owner Occupied Loan with No Ratio is one of our most sought-after Community Development loans. Aplusmortgagerates.com Community Development mortgage loan offers non-traditional homeownership access. Borrowers must have a strong credit history and be willing to repay their debts on schedule. They can also put down as low as 25% to cover their down payment. (p.s., the down payment, closing costs and reserves can all be gifted). The best thing about these loans is that they don’t require income verification or employment verification.
I am ready to begin the application process. What now?
That’s great! Do not let fear of income verification, tax documentation or other mortgage myths hold you back. You can take the first step of the application process to see if you are eligible for a loan.