No Doc mortgage loans allow homeowners to refinance their current mortgage without documenting their employment status, assets, and income to the lender. There are a number of reasons for doing this: some people want to protect their privacy, others cannot document their income due to the type of work they do, the self employed are one such example.
The mortgage documentation you are able to provide when applying for a mortgage about your financial situation the better your interest rate will be. There are circumstances where a homeowner cannot provide or chooses not to provide all of the documentation traditional mortgage lenders want. For these homeowners refinancing their mortgages with a No Doc or even a Low Doc mortgage will provide options that might not be possible with a traditional mortgage lender.
For individuals who are self employed or do not want to disclose their income and assets for privacy concerns No Doc mortgages provide financing at a premium interest rate. Mortgage lenders that specialize in this type of financing may also require higher down payments or more points paid up front to qualify for the loan. The process of applying for a No Doc mortgage is simple: you will simply provide your name and social security number along with the details of your property and the mortgage lender will process your application based on your credit. There are three basic categories of No Doc mortgages:
No Doc Mortgages
The actual “No Doc” mortgage loan is the closest you will find to actually providing “no documentation.” To refinance with a No Doc mortgage you will provide the lender with general information about your home and existing mortgage. The lender will base their decision for approval almost solely on your credit rating.
Stated Income Mortgages
Stated Income Mortgages are also referred to as Low Doc Mortgages. These mortgages are a popular refinancing option with the self employed. To refinance your mortgage with a Stated Income Mortgage you will need to provide the mortgage lender you earnings going back two years. This documentation is usually provided in the form of tax returns, pay stubs, and bank statements. Because you are providing the mortgage lender some documentation to go by, State Income Mortgages come with lower interest rates than the No Doc Mortgage in the previous example.
No Ratio Mortgage Loans
This type of No Doc Mortgage is for the homeowner concerned about the privacy that does not want to disclose their income. This homeowner has excellent credit and employment history along with sufficient assets to approve the mortgage without providing proof of income. To learn more about your no doc refinancing options, register for our free mortgage guidebook: “Five Things You Need to Know Before Refinancing Your Mortgage.”
Mortgage Refinancing
