How Do No Doc Loans Work?

No-document mortgage lenders offer a variety of different types of no-doc or low-doc mortgages, depending on your particular needs. Below are the most common programs and who might benefit from them.

The term no documentation (no doc) mortgage refers to a loan that doesn’t require income verification from the borrower. This type of loan is instead approved on a declaration that confirms the borrower can afford the loan payments. No doc mortgages are commonly given to those whose incomes aren’t easily verified. Largely unregulated, these loans are mainly based on the resale potential of the secured property and the repayment structure of the mortgage.

ASSET-BASED MORTGAGES

Also called an asset-depletion loan, lenders qualify you based on up to 100% of your liquid assets divided by your loan term. For example, someone with a $1 million net worth applying for a 20-year fixed, asset-depletion loan would have $50,000 per year of qualifying income.  Go now, to learn more about Loan Trust loan programs.

Who they’re best for: Wealthy borrowers with a high net worth may benefit from this type of low-doc mortgage loan. Institutional banks may offer them to customers with large balances on deposit.

BANK STATEMENT MORTGAGE

Lenders calculate income based on an average of deposits made into your personal or business accounts over a 12- to 24-month period.

Who they’re best for: If you receive deposits on a regular basis that can be easily documented through your bank statements, this may be a good option.

Available only for investment properties, current no-income, no-asset (NINA) loans are approved based on projected rental income for the property being purchased. Typically, as long as the rent covers the new mortgage payment, no income or asset documentation is necessary.  Go now, to get access to mortgage rates.

Who they’re best for: Real estate investors with enough cash for high down payments may be able to quickly build a portfolio of investment properties with this type of loan.