No-Doc Mortgage Loan Simplifying Home Financing

What if there were a mortgage program that didn’t care about your employment or income?

Rather, the loan would be based on your down payment or equity, credit score, and assets?

Now there is such a loan, called the No Doc Loan. It’s perfect for business owners, investors, and anyone with irregular or non-documentable income.

Apply for a No Doc Loan with our partner lender:

• Self-employed mortgage programs
• Refi, Cash-Out Refi, and Purchase
• Primary, Second, Investment Homes
• No tax returns

Get Qualified

How does a No Doc Loan work?

This loan is best for high net worth individuals who can’t prove their income to qualify for a traditional mortgage.

This loan could also be called a “no income loan” because the lender literally doesn’t review income or employment, period.

Other loans, such as bank statement loans, still verify income, but via bank deposits instead of tax returns. No Doc Loans completely remove the income verification requirement.

Instead, the lender bases approval liquid assets, credit, and equity in the home.

Have plenty of assets, decent credit, and a healthy down payment or existing equity? You might be able to skip income verification altogether.

Who are No Doc Loans good for?

There are hundreds of borrower profiles No Doc Loans could help. Below are just a few types of individuals who could benefit.

• Self-employed individuals
• Small business owners
• Real estate investors
• Those with unpredictable but large incomes
• Retired/FIRE’d
• Seasonal & gig workers
• Cash business owners
• Self-employed less than 2 years
• Experienced a recent health or family event
• Refinancing homeowners
• Recently immigrated individuals
• Those who have been denied traditional financing

To sum up, anyone who can’t document steady income with tax returns  or regular bank statement deposits could be great candidates.

3 “Legs” of No Doc Loan approval: Down payment, months of reserves, and credit score

So how do you get one of these loans?

You could think of No Doc Loans as a 3-legged chair. The three legs are:

• Credit score
• Down payment or existing equity
• Liquid reserves

The first two “legs” are self-explanatory, but what are “reserves”? These are the number of months of payments in reserve in liquid assets.

For example, your future home payment is $4,000 including principal, interest, taxes, insurance, and HOA dues. Twelve months of reserves would equal $48,000. You would need this amount left over after covering the down payment and closing costs.

Now that you understand reserves, below is an example of terms that a No Doc lender may offer for primary residences and vacation properties/2nd homes.

Home purchase or no-cash-out refinance, primary homes and 2nd/vacation homes

• 740 credit and 20% down payment/equity: 12 months of reserves
• 680 credit and 25% down payment/equity: 15 months of reserves
• 660 credit and 30% down payment/equity: 18 months of reserves
• 640 credit and 35% down payment/equity: 24 months of reserves

Cash-out refinance, primary homes and 2nd/vacation homes

• 740 credit up to 70% loan-to-value: 12 months of reserves
• 680 credit up to 70% loan-to-value: 15 months of reserves
• 660 credit up to 70% loan-to-value: 18 months of reserves

You can see a pattern emerging: the lower the credit score, the higher the home equity and/or reserves required.

Assets will be verified with current bank statements. All funds must be “seasoned” 30 days, meaning once the funds are in your account for 30 days, they are considered yours and no sourcing needs to happen.

When considering a No-Doc mortgage loan, you can generally expect to face a higher down payment requirement than with traditional mortgages. These types of loans, known for their minimal documentation needs, typically demand larger down payments to offset the increased risk to lenders. In contrast, conventional mortgage options often require a lower initial payment. Understanding this difference is crucial for borrowers evaluating their financial readiness for each loan type.

Maximum loan amounts

Because these loans are meant for high net worth individuals, loan amounts can be quite large. A common limit is $3 million or more. Exceptions may be available if your assets and credit support a bigger loan.

For No-Doc mortgage loans, the maximum loan-to-value (LTV) ratio can be up to 85%. This means you could potentially borrow up to 85% of the property’s value, depending on your financial situation and the lender’s criteria.

By combining a significant loan amount with a high LTV ratio, these mortgage solutions provide flexibility for those with substantial financial resources.

No Doc Loan lenders

While No Doc lenders are harder to find than traditional ones, they do exist and lend in nearly every state in the U.S.

These lenders specialize in unique scenarios and can make their own approval decisions.

The funds come from private investors. Lenders are not beholden to government agencies to determine rules. Outside-the-box scenarios are gladly considered.

To save some time, you can get connected to a No Doc lender by submitting your scenario to our lender network.

No Doc Loan property types and occupancy

Because the lender has fewer elements on which to base the approval, the property likely has to be solid. The lender will order an appraisal to determine value and marketability.

When considering a No-Doc mortgage loan, it’s essential to understand the types of properties that can be purchased. Common options include:

• Single-family homes
• Condos
• Commercial properties
• Office spaces
• Retail spaces
• Industrial properties

As far as occupancy, many No Doc lenders will approve only lend on primary residences and vacation homes. There are a select few, though, that accept investment properties. This means that, while some lenders focus on owner-occupied properties, there are opportunities for purchasing various types of investment properties as well.

Understanding these guidelines can help in making informed decisions when exploring No-Doc mortgage options.

No Doc Loan rates

You can expect to pay higher rates for No Doc mortgages compared to conventional loans. This is because not proving the borrower’s income adds a layer of risk. However, rates can start at around 4.375%, offering a baseline to consider when assessing your options.

Still, these loans can be a great value, considering their leniency on traditional loan requirements. Here’s why you might find them appealing:

• Flexibility: Ideal for self-employed individuals or those with non-traditional income streams.
• Speed: Often faster to process due to less paperwork.
• Privacy: No need to disclose personal financial details.

Speak to a lender to get your No Doc Loan quote and see how these rates apply to your unique financial situation.

Are Interest-Only Options Available for No-Doc Mortgage Loans?

Yes, interest-only options are indeed available for no-doc mortgage loans. This type of loan can be particularly attractive for individuals who prefer lower initial monthly payments. By opting for an interest-only plan, borrowers are required to pay only the interest on the loan for a specified period, which can range anywhere from five to ten years.

Key Benefits:

• Lower Initial Payments: The primary advantage is the reduced monthly payment since you’re only covering the interest.
• Cash Flow Management: Ideal for borrowers who need more cash on hand for other investments or expenses.
• Flexibility: These options can be beneficial if you expect your income to increase in the future.

Considerations:

• Long-Term Cost: Eventually, you will be required to pay the principal, which could significantly increase your payments after the interest-only period ends.
• Equity Build-Up: With interest-only payments, you aren’t building equity in your home, as you’re not paying down the principal.

Before selecting this option, it’s advisable to consult with lenders and financial advisors to ensure it aligns with your long-term financial plans. Some well-known lenders like Bank of America and Chase offer interest-only mortgage products, often tailored to specific borrowing needs.

Available Loan Terms for No-Doc Mortgages

No-Doc mortgage loans offer a variety of terms suitable for different investment strategies. Here’s a detailed look at what’s available:

• Interest Rates: Competitive rates start as low as 4.375%, providing attractive options for borrowers seeking minimal documentation.
• Credit Score Flexibility: Borrowers with FICO scores down to 650 can qualify, making these loans accessible to those with less-than-perfect credit.
• Loan Amounts: Depending on your investment needs, you can secure loans ranging from $100,000 to $5 million.
• Interest-Only Payments: There’s an option for interest-only payments, which can help manage cash flow, particularly in the early stages of property investment.
• Loan Types: Choose from various structures, including 5/1 ARM, 7/1 ARM, or a traditional 30-year fixed rate, to match your financial goals.
• Loan-to-Value (LTV) Ratio: Financing is available for up to 85% of the property’s value, allowing for significant leverage in investments.
• Blanket Loan Options: These loans can cover multiple properties under a single mortgage, beneficial for portfolio investors.
• Property Types: This loan is tailored exclusively for investment properties, such as single-family residences, condos, commercial spaces, offices, retail outlets, and industrial properties.

These varied terms cater to savvy investors looking to expand their portfolios without the burden of extensive documentation.

No Doc alternatives

If your main goal is to avoid submitting tax returns, there are other loan types available.

DSCR loans: Investment property loans that base approval on the property’s cash flow. If  rental income is higher than the payment, it may be approved. The buyer does not need to provide personal income information.

Bank statement loan: Rather than pay stubs or tax returns, the lender reviews regular deposits on bank statements to verify income.

Owner-occupied hard money loans: While hard money loans are traditionally meant for temporary investment property financing, some lenders allow you to use them to buy or refinance a personal home as well.

ITIN loan: Applicants with a source of income but no social security number or permanent residency status in the U.S.

FAQ on No Doc Loans

How to apply for a No Doc loan

To apply, find a No Doc lender that matches your scenario. Complete an application over the phone to see if you may be approved.

Follow These Steps for a No-Doc Mortgage Loan:

1. Complete the Initial Inquiry: Begin by identifying a No Doc lender that aligns with your financial scenario. This is crucial for ensuring compatibility with your needs.
2. Submit Your Application: Once you’ve identified a potential lender, proceed with your application over the phone. This initial step will help determine your eligibility for approval.
3. Evaluate Your Options: After submitting your application, take time to consider the options available. Evaluate each offer based on your specific requirements and financial goals.
4. Select the Best Offer: Choose the offer that best suits your needs. Consider factors such as interest rates, loan terms, and lender reputation.

By following these steps, you can navigate the No-Doc mortgage process more efficiently and increase your chances of securing a loan that fits your needs.

If you’re having trouble finding a lender, simply complete a short questionnaire to be matched to a partner lender.