No Doc Loans - A No-Doc loan allows the borrower to apply for a loan and not have to state their income, employment, assets or even submit bank statements. This type of loan is often time appealing to Self-employed, single women who do not have the required two year track record and many successful entrepreneurs who simply don’t want to reveal how much they make. In doing a No-Doc loan the borrower will have a one percent higher rate on average than most conventional loans.These loans are based on the value of your home and your credit report. Interest only options are available including the 30 year fixed rate programs.
No Doc Loans are also called No Income No Asset. They are not the same as Stated Income, Verified Asset or Stated Income, Stated Asset.
No doc loans are often confused with stated income loans but there is a difference. In a stated income loan the method of earning income must be proven but the borrower is allowed to simply state the amount of that income without providing any proof. A no doc loan means that no documentation at all regarding the amount or the method of earning the income is required.
Great loans for people who have lost their job or in a case where the amount of stated income would seem unreasonable.
No Doc programs are available on loans as great as $1 Mil to 100%
In some cases a lenders guidelines for a no doc loan even waive the need for a full appraisal, or the requirement that the borrower have the property for at least 12 months before refinancing. This is a useful program for investment property owners who need to draw cash out of the equity of a property that was rehabilitated. Most lenders will not use the new appraised value with out additional documentation and "seasoning" of the property for at least 6 months and usually 12 months.
Individuals who live off of equity and debt investments very often have no means of verifying employment or income due to a variety of factors, and are excellent candidates for no-docs / NINA type loans.
No doc loans are much easier to process than the normal loans. There is very little paper work in comparison and not much to verify.
There are lenders offering 100% no-doc loans, but to qualify you must have excellent credit and reserves. Often times this is limited to borrowers who have owned property in the past.
Past credit history and credit score is very important when applying for a no documentation loan since the lending decision is based on extremely limited information.
A NO-DOC loan is good for borrowers who just relocated, or have recently become self employed.
A No Doc Loan means that you do not have to state your income, employment, or assets. The lender's main criteria for approval are your credit history and the equity in the property. These loans are available with as little as 5% equity or down payment! A No Doc Loan is great for those who have lost
their jobs, recently retired, and newly self-employed people, among others
No doc loans are ideal for people who have changed careers or have income that is then being unreported.
No Doc loans require the least documentation and are for buyers with good credit. The buyer provides minimal information and the lender does the rest. No Doc loans are great for people who want maximum privacy.
NO doc loans are not a opportunity to lie about your income to obtain a more exspensive house then you can acctually afford.You are responsible for providing an accurate figure when the loan officer ask's for your income amount. The loan officer should not coach you or fill in the amount for you. If the loan is audited and fraud is discovered you and or the loan officer can be held accountable under the law.
In a soft real estate market, homeowners with no equity in the homes are much more like to default on their mortgages. Because of the intrinsic risk of default associated with No Documentation Loans, most lenders require that the home buyer commit a bigger down payment towards the property.
The first time homebuyer needs to be careful on payment shock. For example- the borrower has been paying $1000 as his rent. The lender usually doesn't want to see the borrower making more than $1500 as his/her mortgage payment (50% payment shock). Unless the broker could present some compensating factor, the lender has a limit on how much payment shock the borrower should face.
No doc program for a first time home buyer is available as well. However, the first time home buyer is required to produce a legitimate verification of rent for past 12 months with no lates. The lender wants to make sure that if the borrower is a responsible on house payment.
No Documentation Home Loans - No Documentation Home Loans may be an excellent choice for borrowers who have difficulty documenting or even stating their income.
These types of loans are ideal for people who recently changed careers, and for those whose personal financial privacy is needed.
NINA Loan - A NINA Loan is a where the borrower does not disclose income or assets on the application.
These loans are generally a higher risk to the lender. Since they are higher risk loans they demand a higher fico score and the rates can be higher.
NINA loans are often used by homebuyers whose incomes are difficult to document, such as waiters, taxicab drivers and hotel doormen, whose incomes consist mostly of cash tips. Many small business owners also prefer NINA mortgages because their incomes are closely tied to their business. When business owners apply for Full-Doc loans, banks require their business financial documents, such as 1120, 1120S, 1065, various schedules, year-to-date Profit and Loss statements, business account statements, etc., in addition to their personal financial documents. In stead of disclosing all their business financial information, most business owners opt for the simplicity of NINA mortgage loans.
NINA mortgages, No-Income No-Asset, do not require loan applicants disclosing the amount of their salaries and their cash reserves. Banks still want to know about the homebuyers' employment information. NINANE, which stands for No-Income No-Asset No-Employment, or better known as No-Doc mortgages, do not require even the disclosure of the homebuyers' employment.
NINA loans usually require a higher credit scores. Genrally the higher LTV(loan to value)the higher the score needed to qualify
The NINA loan is typically chosen for self employed borrowers that do not have seasoned funds and cannot prove thier income. Season funds must have a trackable history of 60 days and cannot include cash or unsecured borrowed funds.
The Loan To Value ratio in which borrowers are allowed to borrow are usually much lower on a No Income, No Assets loan program.
The line gets fuzzy between no-ratio and NINA mortgages, and generally is delineated by credit score. In many cases, the lender will want to know what the NINA applicant does for a living, and for how long. Lenders feel more comfortable with a borrower who has been doing the same job for at least two years.
The NINA loan approval is based on down payment, credit history, and property value. This program still requires "employment" documentation of your past 2 years, while others do not.
Because NINA mortgages require less paperworks, they generally take less time to underwrite and less approval conditions to clear before closing.
NINA stands for "No Income, No Assets".
This does not mean that the borrower does not have income or assets. It just means that the borrower does not want to disclose that information to the lender.
These loans typically carry higher interest rates than fully documented loans.
NINA Loan - A NINA (short for No Income, No Asset) loan is where the borrower does not have to disclose income or bank statements on the application.
With a stated loan you are required to show proof of a job, your job history, and you need to list your true income on your loan application. The reason why people do stated income loans is for reduced income documentation. With a stated income loan you are not required to show W2's, pay-stubs, tax returns, bank statements, etc... to show proof of your income. The bank is trusting that you are listing your actual income on your loan application. Usually a stated loan will carry a little bit higher rate than a regular full income documentation loan and the qualifying requirements will be a little tougher as well. However, if you do not actually make as much money as you are stating on your loan application and you are lying about your income a more appropriate loan may be a NINA, No Income, No Asset type loan. With this type of loan you do not have to disclose an income amount on your application at all. While your job will still be verified, to make sure you actually do have a source of income, there will be no income verification and there will be no income even listed on your loan application at all. NINA loans will carry even a higher rate bump than stated loans because of the higher risk in these types of loans. These types of loans are good for people who are self-employed and make a lot of money but write off a lot too. NINA loans are also good for people whose incomes may be just a little higher than the permitted DTI, debt to income ratio, on a certain program. NINA loans can also be good for people who have other sources of income, in addition to their primary jobs, that can not be documented or would not be accepted by a lender. Consult your mortgage professional to find out which mortgage loan program is best for you.
No Income No Asset loans can be a great alternative to stated income loans.
With this program, you will still likely be required to verify that you do have a source of income. One way of supplying this information is through a Verification of Employment, by which your employer verifies that you are an employee of their company. Other options, for the self-employed, include providing a copy of your business license or a letter from your Certified Public Accountant stating that you do generate income.
NINA loans are sometimes referred to as no doc loans, however "true no doc" loans are sometimes further defined as NI NA NE for No Income, No Assets, No Employment documentation. These loans are ideal for borrowers who have difficulty substantiating employment, including the recently retired, and borrowers who have started their own business within the last 12 to 24 months
The NINA loan program is perfect for borrowers who are self-employed who may not be able to document their income for any reason.
For the average homeowner who is on a fixed income or are wage earners who may qualify based on their credit, be careful not to buy too much house than you can actually afford.
Only borrowers with strong credit will qualify for this type of loan. Also, expect to pay a higher interest rate and be limited to a lower LTV or loan to value.
NINA Mortgage Refinance - NINA stands for No Income, No Assets and means that a borrower can qualify for a loan without present documentation of either income or assets.
Sometimes NINA is reffered to as a NO DOC type of loan. However some NINA programs will still verify employment. A true NO DOC loan will not verify employment.
Reduced Documention Loans - There are many programs available that are for people who may not qualify for the standard full documentation required by many different lenders. Some of reduced documentation loans compensate for the lack of supportive documentation that may need to be required.
Some of the examples are as follows:
Stated Income, Verified Assets or SIVA
Stated Income, Stated Assets or SISA
No Ratio
No Income, No Assets or NINA
True No Doc
A Stated Income Loan requires less paperwork than normal for approval. The income is stated on the application. Tax returns, w-2 forms, and pay stubs are not required. The stated income should be reasonable for your occupation
Stated-Income Stated-Assets mortgage is a type of mortgage program in which the borrower does not need to furnish proof of his income and assets. In other words, no paystubs, W2's, tax returns, bank statements, are needed to document the borrower's financial ability to repay the loan. The applicant's income is merely disclosed, or stated, on the Uniform Residential Loan Application.
When your scores are high enough the lender may even offer a reduced documentation program at no additional cost to you. They look at the higher scores as you being responsible enough to know what you can afford and what you can not. Also the higher scores equates to less risk for the lender.
Reduced documentation loans are not an opportunity to falsify income in order to obtain larger loans. This type of mortgage fraud is being more closely investigated by lenders and the FBI.
Reduced Documentation loans are for borrowers that have unverifiable income or assets. Reduced documentation are also for borrowers that do not want the hassle of locating documents or who want to keep their information private. They are willing to pay a premium for this usually paid for with higher interest rates or points.
A Stated-Income loan for a self-employed borrower means you do not have to provide income documentation but you do have to provide proof of employment. Past two years business license will usually suffice.
Self Employed borrowers typically use reduced documentation loans due to tax deductions reducing the actual income/profit of their businesses.
Cash tip earners also use reduced documentation loans since their cash income is not documented.
If your credit scores are high enough many lenders will offer your reduced income documentation. This reduces the amount of documents needed to prove your employment history, income, or assets. Ask your Preferred Mortgage Professional if your credit qualifies for a "rapid" processing feature.
Many lenders even offer reduced documentation loans for borrowers who have salaried, W-2 type employment. Why would a lender do this? In addition to the salary, the borrower may have other income which cannot be documented. Examples of such income include a side business, room rental, income from loans to family or others and many other situations.
Some reduced doc programs only need 6 months worth of bank statements.
Another example of reduced documentation, or alternative documentation, is using 6, 12 or 24 months bank statements to verify income. With a bank statement program most lenders will add up the total amount of the deposits for said number of months and then divide that total by the total number of months being used and they will use this amount for your average monthly income. Some lenders will only use a percentage of the avg. monthly income calculated but most lenders will use the full amount.
The Reduced Documentation loan is geared toward the self-employed borrower and those whose work situations don’t fit the standard mold. It reduces the amount of paperwork you need to gather, eliminating many of the steps required when applying for a loan.
Choosing a reduced documentation loan should not be used in order to afford more of a house than you would be able to on a full documentation loan. These loans are designed to accommodate those customers with hard to prove income.
When using bank statements to qualify for a limited documentation loan you typically can use your personal bank statements up to 100% of the deposits over the specified period of time (6, 12 or 24 months) and when using business accounts it is typically 75% to 80% of the deposits.
Often the lenders offset their risk with making these loans by increasing the interest rate or reducing the LTV.
Many times if your credit score is 720 or higher, you can obtain a reduced documentation loan for the same rate as if you fully documented your income & assets.
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