Can I Get A No Documentation Mortgage?

Summary

Some mortgage lenders offer borrowers the opportunity to get a mortgage without documenting much.

Here is how no documentation mortgages work.

Mortgage Lenders

A mortgage lender will usually require you to provide a mortgage application and all its supporting documentation.

For a full documentation loan if you declare you make $50,000 per year you will need to prove it. You will need to provide pay stubs, tax records, and other relevant documents to prove the level of income you are claiming.

A mortgage lender may offer a borrower the opportunity to not document their mortgage application. You can state a level of income, assets, and employment on your mortgage application without providing supporting documentation.

There are also lenders who offer a combination of different documentation levels. You may document your assets but not your income.

The more you document, in general, the lower your interest rate will be. A lower interest rate translates into a lower monthly payment.

No Documentation Loan Options

This option is usually available to people who have a lot of equity in their property or borrowers who make a significant down payment on their purchase.

This is because the lender’s risk is offset by the large equity in the property. If the borrower fails to make the payment the lender will be able to sell the property and recoup their loan. The equity in the property is their margin of safety.