If you’re self-employed, have a high net worth, or want to apply for a mortgage without having to verify your income, then the no income verification loan might be worth considering. Just like it sounds, a no income verification loan doesn’t require proof of regular income to qualify. Qualifying criteria are much more stringent, but there is less paperwork involved and no income verification loans can close fast.
OVERVIEW: WHAT IS A NO INCOME VERIFICATION LOAN?
No income verification loans are mortgages that do not require income verification to qualify. In general, borrowers must show that they can repay the mortgage through means other than regular employment or monthly income.
No income verification loans are sometimes referred to as “stated-income loans,” or “no-doc loans,” or “alt doc” loans. The mortgages listed below are varying types of no income verification loans:
- Stated income, stated assets (SISA loan)
- Stated income, verified assets (SIVA loan)
- No income verification, verified assets (NIVA loan)
- No income verification, no asset verification (NINA loan)
“Stated” income or assets refers to assets or income stated by the borrower. For this type of loan, a borrower declares their annual income and assets to the lender without proof. The borrower is not required to show documentation or verify the income or assets.
“Verified” income or assets refers to income and assets verified by the borrower through financial documentation. Borrowers may provide documentation in the form of bank statements, retirement or investment accounts, asset statements, evidence of equity or stock, or other documentation recognized by the lender.
Are No Income Verification Loans Still Available?
Yes, but not for everyone. In the mid-2000s, no-doc loans grew popular among borrowers with less predictable income streams such as independent contractors, commission-only sales partners, and others with seasonal income. However, after the housing crash and the Great Recession that followed, requirements for a no income verification loan have become more select. There are new mortgage industry safeguards in place to protect both homeowners and investors.
Borrowers who have a high net worth, assets in real estate, liquid investments, or company equity are among those who may be eligible. In addition, a no income verification loan often requires a 700+ credit score and a large down payment (10-40%).
How to Apply for a No Income Verification Mortgage
For a qualified borrower, no income verification loans are still available today. However, qualifying for a no income verification loan in 2021 can be difficult if you’re shopping around independently. Today, fewer lenders underwrite no-doc mortgages. What’s more, lender requirements vary widely when it comes to qualifying for a no-doc mortgage.
Working with an experienced mortgage broker can give you access to the best lenders.
To apply for a no income verification loan, talk with a professional mortgage broker in your local area. The requirements vary from lender to lender, and a mortgage expert can make sure you have everything in order before you apply.
Additional Refinance Options That Don’t Require Proof of Income
Side note: There are other home loan options for borrowers who don’t fit the profile above for a no income verification loan. Government-backed mortgages offer refinancing options that don’t require income verification or employment verification. If you want to refinance an FHA home loan, VA loan, or USDA loan, talk to a mortgage expert. You could refinance your mortgage and get a lower rate without needing proof of income or employment.
A no income verification loan is ideal for borrowers who have a high net worth or want to qualify for a mortgage without verifying income. Typically, borrowers will need to show proof of assets such as real estate, investment earnings, or equity in a company to qualify. No income verification loans can also require a high minimum down payment (10%-40%) and a 700+ credit score.
If you’re thinking about applying for a no income verification or no-doc loan, give us a call. We work with multiple lenders across the Pacific West Coast, and we can help you get qualified.