No Document Loans for 2020 – No Doc Loans – No Tax Returns
No Documentation Loan Options
No Doc Loans or no document loans provide increased ease and privacy for borrowers in who sometimes have difficulty documenting their income. No doc loans do not require borrowers to provide any income or very little asset documentation to qualify for a mortgage.
A question that many people are asking is what are my 2019 No Document loan options?
- Minimum of 10% down
- Provide only your bank statements
- Property should be your primary residence
- We can work with almost any credit score
- No Tax Returns Needed!
Click to get help with a no doc loan or call 732-761-9041
Different types of no document loans
The more documentation you provide your no doc lender (employment, income and credit history) with your loan application, the lower your interest rate may be. Many home buyers cannot provide documentation for personal or tax reasons, and are glad to have no doc loans as an option. Many of these home buyers have a healthy income, or savings, and a credit history.
A No Doc loan or Low Document loan provides increased ease and privacy when getting a mortgage. In the past, anyone could apply for a no doc loan but now loans like this are for self employed borrowers. No doc loans are also available to those who are self employed and who need a bad credit mortgage.
Borrowers that opt for a No Doc loan are typically those who don’t prefer to have their entire life and financial history presented to the lender. For instance, they might be using an inheritance to secure a loan or have fluctuating income from owning their own business. They also may not qualify as a self employed borrower if they had to do it based upon their net income on the tax returns.
Ease is a big factor as well. With a No Doc loan, the borrower provides their name and social security number, along with information regarding the property being purchased. The rest is up to the no doc lender.
No Doc loans require the least documentation and are for self employed people. The borrower provides minimal information (usually social security number and general property information) and the no doc lender does the rest. No Doc home loans are great for people who want maximum privacy.
The Main Types of No Doc Loans & Low Doc Loans
This is for self employed individuals only. No Doc Lenders will ask you to provide 12-24 months bank statements. They may also ask for your tax returns but the bank statement deposits will be used for qualification purposes. The average monthly deposits will be used to qualify you for your mortgage. They will take a percentage of those deposits and those dollars will be treated as income. The good news is that all of the legitimate tax deductions that you are taking for your business will not be used against you like they are when you apply for a conventional loan. Bank statement loans are the best option available to you now.
Stated Income or Low Doc Loans
Stated Income Loans, or Low Doc loans, typically attract people who work on a cash or commission basis or people who don’t draw a consistent salary. The borrower will need to disclose earnings, usually for two years, and might need to show tax returns and bank statements.
In the past, stated income loans allowed borrowers to simply state what their income was on the loan application, but they did not have to provide any proof of that income. So, no pay stubs, tax returns, or W2s. Even salaried borrowers were able to get these loans. It was like the wild wild west in the mortgage industry.
Update – We now have a no doc lender that has a program that is a true no income documentation loan. They also do not require that you have a job. You will need a significant down payment and decent credit scores. Contact us to find out more and whether it is available in your state.
No Ratio Loans
No Ratio mortgage loans are for borrowers who do not wish to disclose their income; therefore there is no debt-to-income ratio for the lender to consider. The No Ratio borrower has good credit and abundant assets that make up for the lender not considering the borrower’s income information.
This loan can be a quick and easy process for borrowers that would have difficulty gathering documentation. Keep in mind that very few lenders offer this type of loan at the moment.
With this loan, the borrower would document their income but the ratios were not considered during the loan approval process. These mortgages came with a slightly higher interest rate. UPDATE – No Ratio Loans are hard to find now.
No Income No Asset Loans (NINA Loans)
No income no asset loans (also called NINA loans) are for self employed people who do not or cannot disclose both income and assets. NINA loans are also for borrowers whose income and assets are typically not sufficient to qualify for a loan. In this case, the borrower will need to have good credit.
NINA loans will also be quick and easy to process. With NINA loans, neither your income nor your assets were documented on the loan application. Recent lending guidelines have limited the availability of NINA loans for primary residences and you are more likely to find lenders who offer this for investment properties.
No Doc Refinance
There are lenders who offer a no doc refinance to borrowers who cannot document their income or assets. The rates will be similar to what you would get if you were purchasing the home. However, a no doc cash out refinance will be limited to the lenders maximum loan to value ratio.
No Document Loans – No Doc Loans (FAQ) Frequently Asked Questions
A: No doc loans have always required a down payment of at least 10%. If you need a no money down loan, then you will have to qualify for the mortgage using your tax returns and income.
A: There are a handful of lenders who specialize in lending to self employed borrowers. We can help you to get connected.
A: Yes, there are but only offered by certain lenders. Read our article about no tax return mortgages to learn more.
What Others Are Saying
Prior to the housing bubble, a dead person could get a loan without providing any documentation. Basically, all you needed was an address and a signature. Legislators forced banks to offer loans that would help more people to be able to purchase a home. In fact, there were fines if the lenders did not offer these loans. The lenders complied and provided these loans but them sold them off in bundles as investments.
When people started to foreclose, the loans defaulted and the investments failed. This resulted in the mortgage meltdown of 2008. Politicians blamed the lenders. Interestingly enough they did not blame the big banks but instead they blamed mortgage brokers. Brokers do not approve loans.
What happened next was the lending guidelines tightened. All of the creative loan programs disappeared. Gone were no doc loans, stated income, option arm loans, etc. Some lending institutions even went out of business. Indy Mac Bank for example was a lender that specialized in no doc loans. They are gone now.
After a few years of mortgage darkness, some of the creative programs such as bank statement loans started to come back again. Now, we have enough options to help people who cannot qualify for a conventional loan.