How to Compare No-Income Verified Mortgages

Commission earners and the self-employed qualify for few loans due to their low stated income. A no-income verified mortgage is the solution to this problem. Here's how to compare the rates and conditions of a no-income verified mortgage.

Instructions

Finding Lenders to Compare

1. Start with banks and credit unions with which you have an established relationship.

2. Next, look at large lenders like Chase (see link below).

3. Ask friends and family members for mortgage broker or lender references.

4. If all else fails, check the phone book.

Compare Lenders

1. Ask about the lenders' requirements. Eliminate any lenders whose requirements you don't meet.

2. Begin the pre-approval process with the remaining lenders.

3. Compare the overall loan amounts offered, and choose the top three.

4. List in order of interest rate, scoring 3 points for the lowest interest rate, 2 points for the median interest rate and 1 point for the offer with the highest interest rate, like this:

   - Loan A interest rate 6.8%, scores 3 points
   - Loan B interest rate 7%, scores 2 points
   - Loan C interest rate 7.3%, scores 1 point

5. Score loan offers according to terms, adding 1 point to each loan that is an adjustable rate mortgage (ARM) and 1 point to each loan that is interest-only.

6. Remove the loan with the lowest score.

7. Compare the documentation requirements. Give 3 points to the loan offer with the fewest documentation requirements.

8. Keep the loan offer with the highest score if you believe the lender to be reliable and professional.

Tips & Warnings

• Be prepared to promise life and limb when you qualify for a no-income verified loan. These are great risks for the bank.

• Be ready to prove everything you state on your loan application. While you may not be able to show a high net (after taxes) income, you'd better be able to prove a high gross (before taxes) income.

• Shop around. There are many lenders that will loan money on an undocumented basis, but you have to ask. They don't like to advertise this type of loan.

• Be cautious of comparing apples to oranges. A 30-year fixed loan with full documentation will always have more favorable rates and an easier application process than a stated or no-income verified 15-year ARM.

• Don't look to a stated income loan to save money. Again, the interest rates for this type of loan are always going to be higher than documented income loans. The bank is taking a bigger risk when they can't see proof of ability to pay.

• Never lie on a loan application, whether a documented or stated income loan application. This fraud can cost you a little in the short run and a lot in the long run.

• Don't fall for a shyster that asks for no proof at all of your income. You are likely to find a significant last-minute increase of your interest rate at the closing table from these crooks.