What is a No Documentation Loan?
No documentation loans (no doc loans) come in three varieties, which are distinguished by the amount of documentation and verification they require. A pure no doc loan requires no income, employment information, or assets to be stated on your loan application. This means that only your credit profile and the value of the property will be verified as part of the application process. Pure no doc loans tend to charge higher interest rates than loans that require more extensive documentation. No ratio loans, for example, require you to verify your employment and assets, but you do not have to state your income. As a result, no ratio loans charge lower interest rates than the pure no doc loan. A stated income loan also requires you to verify employment and assets, but you will also need to state your income. This statement is not subject to official verification. Stated income loans generally charge the lowest interest rates of all no documentation loans. Another consideration when deciding
No documentation loans are loan applications that do not require the usual information needed to process a loan request. With a no doc loan, the borrower does not have to supply information regarding current employment, sources of income, or assets currently in the possession of the applicant. Generally, the no documentation loan requires nothing more than the basic information needed to run a credit check. The information contained on the credit report will determine whether or not the applicant is eligible for a no documentation loan. When a no documentation loan is requested as a means of acquiring property, the lender normally will also take steps to verify the current market value of the land and any buildings currently in place. Assuming that the credit report indicates that the applicant is eligible to receive the loan, and the property is valued at a price that is equal to or exceeds the requested amount, lenders will normally approve the loan in a very short period of time. Th
Having your own business is a dream come true for may people. But it can sometimes cause trouble when you need to show proof of your income. But if your income doesnt’t come from a paycheck or you don’t want to reveal personal things to a lender, you can still get a home loan. It will cost a bit more than if you could provide proper documentation but to some that is a small price to pay for privacy. Many buyers choose not to offer documentation and willingly opt for a higher interest rate .
