The flexibility of our NoDoc Program will
help more people own a home. The particular focus is on recent immigrants
and foreign nationals. The Garden State Mortgage NoDoc Program
is the perfect way to finance homes for people from cultures that
do not use banks or credit reporting. Of course other borrowers
may also benefit from privacy features of the NoDoc Program. Don't
let difficult or unusual situations stop you from owning a home!
True No-Doc Features |
Why It Works |
NO stated
employment and/or |
Employment may be difficult to
verify. |
employment
verification |
Recently self-employed will not
have the 2-years required by most lenders. |
NO stated
income and/or
income
verification |
Income for self-employed may
not be documented.
Foreign Nationalsmay not be paid
in USD$ |
stated
assets and/or
income
verification |
Assets may be in foreign banks. Down
payment may be in cash ("Su-Su", etc.) |
4506
or 8821 |
No signatures or IRS forms |
Credit
History |
Borrowers without established
credit qualify for our True NoDoc Program |
Financial Privacy and Faster Approvals!
No-Documentation Loan Basics
Mortgage loans are approved or denied based on a
review of their four components; Income, Assets, Credit and Collateral.
The collateral is the property. The lender sends a real estate
appraiser to the property to determine if it is adequate collateral
for the loan. If the lender has to foreclose on the property they
at least know in advance what they're getting. That's all I have
time to say about the Collateral for now. The other three components
of income, assets, and credit are all carefully reviewed by the
underwriter to determine the Ability and Willingness of the borrower
to repay the loan. In the lending business Ability and Willingness
to repay debt are two very important ideas. For example, someone
with a good income and a poor credit history may show a very good
ability to repay debt but not the willingness. For this reason
they may not get the loan. The poor credit history suggests there
may be problems getting on-time monthly payments. Alternatively,
someone with a lower income and a very good credit history, especially
in the last two years, has demonstrated a strong willingness to
repay a loan even if they may not have the income to qualify for
a loan. Thus, a possible No-Doc candidate. No-Doc usually means
the lender does not verify the borrower's income. So what's left?
The assets and the credit history. The assets are the cash used
for the down payment and closing costs. This discussion is limited
to loans with at least 25 percent down payment. Please call a
Mortgage Consultant to discuss Low-Doc programs with less than
25 percent down. A No Income-Full Asset (NIFA) program means the
lenders is going to look at the activity of the last three months
of the borrowers bank accounts and make some assumptions about
the borrowers ability to save money. This is important because
history has shown that good savers also tend to be reliable in
the repayment of their debt and also don't usually carry a lot
of debt. In other words there exists a strong willingness to repay
debt. All good things when you're asking the lender not to check
your ability (income) to repay debt . Always available is a No-Income
No-Asset program (NINA) also called a NIC-NAC loan (No Income
Check-No Asset Check). This "catchy-phrase" loan program is based
on the borrower's credit and the condition of the property they're
buying. That's it! What else is there to look at? Suffice it to
say the credit history of the borrower better be pretty darn good
if not excellent. Also it's worth noting that extreme handy-man
specials or ultimate fixer uppers don't usually get financed with
No-Doc programs. Lenders don't want the headaches!
A credit report tells a lot about a borrower. Clues
to the responsible creation of debt and the satisfactory ongoing
management of debt are what lenders are looking for on a credit
report. As a general standard, consider five satisfactory credit
accounts at least two years old each as an adequately established
credit profile for any Low-Doc program. An occasional late payment
reported here and there is usually OK. But be prepared to write
an explanation for any unusual items. Late payments on the mortgage
can spell big trouble. So please don't be late on your mortgage
payment, not even once, if you are considering a Low-Doc loan.
Remember this, the credit report is the single most important
source of information a lender has at its disposal to approve
or deny your mortgage application.
In some ways the underwriting of a Low-Doc loan
is like making a business decision. There are no clear cut set
of guidelines to follow. The underwriter must rely on partial
information to make the call. The BIG QUESTION is "does the scenario
or all the information on loan application make sense?" Remember,
No-Income verification programs are not the same as No-Employment
verification programs! For example, for self-employed borrowers
proof of a means of income is quite different then proof of the
income itself. A means of income refers to what the borrower actually
does for a living and how long they have been doing it. There
are many ways to verify what someone does for a living, how long
they been doing it and their level of success and expertise. Proof
of income usually means the last two years of Tax Returns. The
problem arises when the income is not high enough to qualify for
the loan payments based on the guidelines. There are many programs
where income is not used to approve the loan. Competent mortgage
consulting at the early stages of the mortgage process is essential
to help assure Low-Doc loan applications gets approved quickly
and at a competitive rates and terms. Garden State Mortgage offers
many No-Doc Loan programs. Please contact a Representative for
further discussion on these essential programs.
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