No Doc LoansPosted on September 6th, 2010 William No comments
No documentation loans, also known as liar loans, are granted based on the buyer's stated income and credit record and do not require proof of employment, income, or assets. While they were fairly easy to get a fair years ago, they are effectively gone in the wake of the financial crises; however, this page is still provided for informational purposes.
No-doc loans are useful for people whose employment and income are difficult to verify; for example, professional poker players, those whose jobs are 100% commission, those who live off investments, etc. They provide increased privacy and less hassle than full documentation loans, but you pay a higher interest rate. A full liar loan (so called for obvious reasons) requires only a credit report; there are also NINA (no income, no asset) loans, where employment is verified; this will generally knock about an eight of a percent off of the loan interest rate. It's also possible to verify assets but not income or employment for a similar discount.
Similar to a no doc loan, a stated income loan requires that you show employment and assets, but not pay; these are useful for people who do not draw a consistent salary. However, you do need to show how much you've made for the last few years; these are really differentiated from full doc loans mostly by not having to show you're earning a minimum income each month.
If you don't want to disclose your income, you can also get a no ratio loan; as the lender does not know your income, your debt to income ratio is not considered. Note that in this case you do need to have good credit and assets to show that you'll be able to make payments on the loan.
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