If you’re in the market for loans, then you’ve probably heard about no doc loans, which are loans granted without financial verification. No doc loans and other Alt-A category loans are common choices for the self-employed, those who rely on tips or seasonal income, or people who do not otherwise qualify for traditional mortgage loans. No doc loans are high interest but high reward loans that you might be considering. And if that’s the case, then you’ve also probably come across a 30 year no doc investment loan.
Here at AS-Is Loans, we want to make sure you’re getting the right loan for your specific needs. Scroll through to understand what a 30 year no doc investment loan is and how to qualify for one.
What Is a 30 Year No Doc Investment Loan
Similar to a regular no doc loan, a 30 year no doc investment loan is a type of loan that has more relaxed rules for qualifying and applying. Even though a 30 year no doc investment loan might be a larger sum of money that is borrowed for a house mortgage, the general requirements are proof of employment and a good credit score.
If you are self-employed but want to buy a home, then a 30 year no doc investment loan is something you should look at. Even though many self-employed workers earn a good living, their lack of a regular paycheck and W-2 means that these workers have a more difficult time proving their income to lenders. Being unable to prove a stable income means it’s more difficult to get a mortgage. But don’t lose hope; buying a home with a mortgage is possible with a 30 year no doc investment loan.
Do I Qualify for a 30 Year No Doc Investment Loan
For self-employed workers or workers who have a fluctuating income, you will need to prove to lenders that your income is high enough to pay for the mortgage and likely to continue. Basically, that means you will bring in bank statements and rely on your credit score to prove that you have a good record of repaying debts. In addition to those two factors, lenders might also want to see a lump sum for the down payment, usually 30% right off the top to prove that your income is sizeable enough for the mortgage. With those two factors, you are already well on your way to qualifying for a 30 year no doc investment loan.
That said, while this might sound like a lot of documentation for a no doc loan, unlike other mortgage loan applications, a 30 year no doc investment loan is usually only asking for rough estimates, previous tax returns, and sometimes a list of assets, depending on the lender. Compared to other loan applications, a 30 year no doc investment loan for a mortgage is simple.
Other Factors to Help You Qualify
There are other things that applicants can do to help themselves qualify for a 30 year no doc investment loan; you just need to plan ahead a little. With some preparation before submitting an application, you can almost guarantee that you will gain approval for a 30 year no doc investment loan for a mortgage. Here are the things you can do:
Establish Self-Employment Track Record
This means preparing at least 2 years of self-employment history, although some applications will only require 1 year of self-employment if you have a previous W-2.
Improve Your Credit Report
Check your credit report to identify any problems you may need to fix before a mortgage lender checks your credit. Lenders could reject your application or charge you a higher interest rate if you have a low credit score.
Pay Down Existing Debt
You can improve your credit score by paying off some or all of your debt. This will also lower your debt-to-income ratio, which will make it easier for you to be approved for a mortgage.
By doing these three things, you are proving to lenders that you have a good financial history, which will make them more likely to approve your application. Good financial history makes lenders confident in your ability to pay back what you borrow, so it’s worth the effort to polish your finances up before applying.
Recent Mortgage Changes
There is more good news, too. In 2015, Fannie Mae set new guidelines for loans for self-employed people, such as the 30 year no doc investment loan and other Alt-A loans. These changes include allowing loans for people with the following qualifications:
- Self-employed borrowers with no history of “taking paychecks” (i.e., business distributions are irregular or non-existent)
- Self-employed borrowers who don’t have two years of federal tax returns to support their business
- Salaried borrowers with second, self-employment jobs don’t need to document that income if they don’t need it to qualify for their mortgage
With these recent changes, it’s actually much easier for self-employed workers to qualify for a 30 year no doc investment loan for mortgages than it has been in the past. The loosened guidelines mean that lenders look at your application with a bit more leeway.
At AS-IS Loans, we’ll work with you no matter what your situation. Call today to see what we can do about your no doc loan!