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Are No Documentation Loans Still Available?

Written by Posted On Sunday, 18 August 2019 11:16

Are No Documentation Loans Still Available

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For those of you who remember what the real estate market was like prior to the housing bubble of 2008, you may remember seeing no documentation loans offered back then. Those programs were open to virtually everyone. Individuals with no job at all were able to get approved for a mortgage with a small down payment.

Today, no doc loans are not available the way you may remember. In fact, stated income loans are also not what they used to be. The reality is that these reduced documentation loan programs are truly only available for self employed borrowers now. In today's world, the borrower needs to show the he or she has the ability to repay the loan. As a result, the newest mortgage program that replaced no doc loans and stated income loans is called the bank statement loan.

Bank statement loans allow self employed individuals to qualify for a mortgage using the average deposits into their bank accounts over the past 12-24 months. They do not ask for tax returns and the tax deductions or write offs are not taken into consideration. This is the best option right now for those who cannot qualify for a mortgage using tax returns.

Are No Doc Loans Available for FHA, VA or USDA?

Reduced documentation loans are not permitted with government programs such as FHA, VA or USDA. FHA lenders for example will require you to fully document your income and assets. If you are self employed, then you will need to qualify based upon the net income on your tax returns.

Are No Doc Loans Available for Investment Properties?

Financing for investment properties is available in a no documentation option. These loans will likely require a larger down payment and the property cannot be used as a primary residence. In fact, most lenders who offer this program will not provide financing if the borrower does not already own a primary residence. Interest rates are typically higher and there may be a pre payment penalty. 

Summary

In short, no documentation loans are not available for a primary residence. If you need an alternative documentation loan, then the bank statement loan is your best option today.

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Self Employed Bank Statement Loans

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Eric

Dream Home Financing is like a boutique lending tree. We have been matching borrowers to lenders for 15 years. We can help with all of the basic programs such as FHA, VA, USDA, conventional and more. However, our specialty is all of the niche programs. Stated income loans, bank statement loans, programs for recently divorced individuals, and more...

https://dreamhomefinancing.com

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