Being financially successful certainly has its perks. On the one hand, there is the comfort of always having what is necessary (and what may not technically be necessary), and on the other hand, there is the option of being able to afford ultimate discretion. Purchasing a home becomes much easier because, if the borrower is willing to pay, the paperwork is reduced immensely.
No doc mortgage loans allow customers to withhold information regarding earnings and profits in order to either preserve privacy or to avoid mountains of paperwork. People with various sources of income find out that this is the way to go for a hassle-free experience.
There are three different categories within no doc loans. Stated-income loans are designed for those that work in the restaurant business, or who draw commission at work as the main flow of income. It’s difficult to prove these things on paper, so the no doc mortgage loan can be a lifesaver for these people.
The next type is no-ratio mortgages. Basically, there is no way to determine rates by way of a ratio of debt-to-income, because the borrower does not report income at all. This could be because the borrower is actually going through a fluctuation of income due to a life change, or those that live off investments. Also, this applies to business owners that have money spread so far out that the task of gathering it all together would cost more than the difference. In the case where no income or assets are verified, the loan is called NINA. Minimal information is provided by the borrower to apply for this one. Identification and property value is basically all that is requested, along with a large lump sum for the down payment, of course.
All of these options are available to those that can prove they are good with money. This is done by providing a substantial amount of money for a deposit and showing that there is still enough to pay for a few months of payments. The credit score and report are examined by the lender before agreeing to a no doc mortgage.
There must be strong evidence that funds are handled properly in order for them to take the risk of a no doc mortgage loan on a person that isn’t offering up very much information. It is possible to hold onto privacy and still buy a house, but the price tag is hefty.
While these loans will get you a fast loan, other loans with little equity like 95 mortgages or those that are more than the value of the home like the 125 home equity are on the opposite end of the spectrum, requiring moutains paperwork and are far more risky than a no doc loan.