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What Is A No-Doc Loan?

A No-Doc Mortgage Loan (short for "No Documentation Mortgage Loan") is a type of mortgage loan that does not require borrowers to provide proof of their income or assets. This type of loan was commonly offered in the past to borrowers who had difficulty documenting their income or who were self-employed and did not have traditional income verification methods like W-2s or tax returns.

No-Doc mortgage loans were often used by borrowers who had good credit scores and substantial assets, but limited income documentation. However, these loans became less common after the financial crisis of 2008 due to concerns about borrowers' ability to repay the loans and the associated risks to the financial system. 

Here are some of the different types of no-doc mortgage loans available to borrowers:

  • No-ratio loans: These loans do not require the borrower to disclose their debt-to-income ratio, which is the percentage of their monthly income that goes towards debt payments.

  • Stated-income loans: With these loans, the borrower is allowed to state their income without providing any documentation to prove it. However, the lender may still verify the borrower's employment status.

  • Low-doc loans: These loans require less documentation than traditional mortgages, but still require some documentation, such as bank statements or tax returns, to verify the borrower's income.

  • NINA loans: NINA stands for "no income, no assets." With these loans, the borrower is not required to disclose their income or assets.

  • SIVA loans: SIVA stands for "stated income, verified assets." With these loans, the borrower is allowed to state their income but must provide documentation to verify their assets.

It's important to note that these types of loans may come with higher interest rates and fees, and may be more difficult to qualify for than traditional mortgages. Additionally, some lenders may require a larger down payment or higher credit score for these types of loans.

Today, lenders may offer alternative forms of low-documentation loans that require some income verification or may require higher credit scores and larger down payments. It's important for borrowers to carefully consider their options and understand the terms and risks of any loan they are considering. Give our team NW Alternative Mortgage a call at 503-343-7999 to discover what loans are best for you!

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