No Doc Loans Pro

No doc loans are actually mortgages that do not need documents. The documents usually needed are those for income verification and employment history, however, with no doc loans these documents are not necessary. No doc loans are an excellent alternative for those that cannot produce the required paperwork for the traditional income loan. This is a big advantage for people who are unemployed, self employed or individual contractors. No doc loans for mortgages can be used to buy or refinance single-family homes, condominiums, or townhouses. No doc loans can also be used to purchase non-owner properties or rental properties. When they are used to purchase these properties where the owner does not occupy the property there are different guidelines that apply. These no doc loans are at a lower interest rate than regular no doc loans. They also need either a down payment or equity if refinancing.

In addition to not requiring paperwork, no doc loans also do not require assets. No doc loans are approved and based solely on the strength of the borrower’s credit history and either the down payment or equity from property. However, the credit history and current credit score are also key decision factors when applying for no doc loans since underwriters have limited information. For no doc loans, credit scores above 660 are required. However, most subprime lenders give no doc loans however, when the subprime industry needs to tighten up no doc loan programs are the first to be eliminated because of the normal risk involved.

The biggest drawbacks to no doc loans are the very high interest rate. These interest rates can be as high as 2.5%. In spite of the high interest rate no doc loans are the best way to go for individuals who may have changed careers, have a hard time proving their income, are seasonal workers or are financially comfortable and do not wish to prove their income. Keep in mind though, that no doc loans are not a way to purchase property that you wouldn’t normally qualify for. Even though an individual might have perfect credit, the lender will usually charge a higher rate of interest than when compared to loans that require full documentation of all income and assets.
Find out exactly what type no doc loans you qualify before applying to any bank or financial institution.