Can I Get A Low Documentation Mortgage Loan?

Summary

Mortgages often involve a blizzard of paperwork.

Here is how you if a low documentation loan is right for you.

Basics

A typical mortgage application may involve:

• income documentation
• asset documentation
• employment documentation
• tax records
• bank statements
• statements of explanation

Many borrowers document:

• the previous two years employment
• the previous two years income

For many borrowers this may not be an option.

They may not want to share their private financial information, or they don't want to explain gaps in employment or income.

Low Documentation Loan Options

Many lenders may offer borrower the option to get a mortgage with much less documentation.

This can be done many different ways.

Some lenders will allow a borrower to prove their assets but not their income.

Other lenders will allow a borrower to provide almost no documentation.

This is often known as a "no documentation" or "no doc" loan.

Interest rates on these types of loans are usually higher than on other mortgages.

Often times a lender will not lend as much on a property as they would if a borrower disclosed more information.

For example, a lender may offer:

• 100% financing to a borrower who provides full documentation
• 80% financing to a borrower who provides very little documentation

Borrowers with a lot of equity in their property often can use no documentation loans.

Some lenders do not even require a borrower to state where they work or their current income.

Lenders that offer these types of loans are usually specialized mortgage lenders.