How to Qualify for a No Doc Home Loan
There are many different types of home loans and loan refinances available, trying to sort through them can be overwhelming. Among the many options out there is a no doc home loan. This basically boils down to securing a home loan without having to provide any documentation of your income. If you work for yourself, this may be an excellent home loan option for you.
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Instructions
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How to Qualify for a No Doc Home Loan
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Contact a loan officer who can secure a no doc home loan for you. The mortgage industry seems to be in a constant state of change and not all lenders will do this type of loan. When you talk to your loan officer, make sure that he has experience working with this type of loan.
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Make sure you qualify for the loan. You have to be self-employed to secure this type of loan. If you are a W-2 wage earner this will not be the loan for you. Additionally, you must have a credit score of 720 or higher in order to be eligible. Give your loan officer permission to pull your credit score or find it out for yourself at a website such as freecreditreport.com.
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Have the home you wish to purchase or refinance appraised. Your loan officer or realtor should be able to put you into contact with a reputable appraiser, who will be able to provide you with the appraised value of your home. Another requirement for a no doc home loan is that the loan value is no greater than 75 percent of the value of the home. If your home appraises at $200,000. for instance, you would not be able to secure a loan under this program for greater than $150,000.
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Make sure that you have enough cash or equity within your home to pay the difference between the loan amount and the value of the home. If you do not have enough money to pay for the other 25 percent of the appraised value, you should look for a more affordable home or a different type of loan. Additionally, since you are not providing documentation of income, you will be responsible for making sure you are to cover the monthly payments you loan officer calculates for you.
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Understand the terms of the loan. No doc loans are generally only available in three-year to five-year arms. They do not provide 30-year fixed loans. In other words, you will likely have to refinance your home in three to five years from the time you secure this loan.
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Attend the closing on your loan once you are approved based upon your credit score and the loan to value amount on your home.
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Tips & Warnings
If you do not have a high enough credit score, work on paying down some of your debt to try to improve it.
