For many people, one of the things on their life-long to do list is to purchase a home. Most people who have a steady job are able to qualify for a conforming loan. This is a loan that conforms to the governments FNMA guidelines. You will find that a conventional loan, an FHA loan, and VA loans fall into this category. These loans generally require quite a bit of documentation to 먹튀검증업체 your income. In fact, they will need W-2 forms, check stubs, and even income tax returns as part of the necessary documentation. They will also usually require documentation of all of your assets as well as your debts. If you find it difficult to provide this kind of documentation, then you may be in the market for a no income verification loan (NIV).
A no income verification loan does not require you to prove how much money you make. These are often called ‘stated income’ or ‘no doc’ loans because you simply write down the amount of income you make and the only documents required are a credit report and your loan application form. The biggest downfall is that you will have to have a higher percentage of the loan as a down payment and the interest rates will generally be higher. The reason for this is that you pose a higher risk to a bank than does a person who can fully verify his income. Conforming loans usually only require about 3% down while a no income verification loan will usually require at least 10% down, whether it is a new home or you are refinancing. This means you can only refinance up to 90% of the value of the home.
The no income verification loan is very helpful to people who are self-employed, independent contractors, and tipped employees. These individuals often find it challenging to prove their income sufficiently for a conforming loan. Individuals who are self-employed often write of many things as expenses, which helps them at tax time but can make it hard to verify their income if they want to purchase a home. Other people who prefer this type of loan are those who are under a time constraint and need the loan to go through more quickly.
For instance, a person who is purchasing a rental property may have a minimal amount of time to close on the loan, and the documentation of all of his other rental properties may take too much time to gather and to go through the loan process. A no income verification loan will not require all of that documentation and will usually proceed much faster.
It is important to be on the watch for greedy mortgage brokers who try to foist a no income verification loan on people who cannot afford the conventional loan. This will cost them more in terms of down payment and interest rates, and if they couldn’t afford the conventional loan, they are not likely to be able to afford the NIV loan either and may end up in a state of foreclosure. Mortgage brokers may also try to push this type of loan onto individuals who have a high debt to income ratio but still have high credit scores. With a high debt to income ratio, it is not likely that they could actually afford this loan.
NIV loans were designed for people who have the income but have difficulty proving it, not for people who can prove their income but just don’t make enough to qualify for a traditional loan. If you are self-employed or cannot prove your income for other reasons, the NIV loan can make sense for you. If you shop around, you can find reasonable rates.
