Everyone’s financial circumstances are different, and not everyone can qualify for a traditional mortgage. Luckily, there are financial products available that are designed to help people in non-customary situations. Read on to discover the truth about 30 year no doc investment loans.
What Is a 30 Year No Doc Investment Loan?
A 30 year no doc investment loan is a loan that does not require borrowers to provide income-verifying documentation to lenders. This type of loan is often offered by mortgage lenders to consumers who cannot qualify for standard loans. This may be because their income may fluctuate or is hard to verify, such as what often happens with consumers who are self-employed. It may also be offered to long-time customers with excellent credit. However, applicants must usually provide a significant down payment, often through equity in personal savings or security.
Types of No-Doc Loans
There are two primary types of no-doc loans. There is the SISA (stated income, stated assets) or NINA loans (no income, no assets) loans. In some cases, you may also find NINJA loans (no income, no job, or assets). In the last case, jobs are not verified.
They were originally created for business owners who had adequate cash flow to pay off their mortgage, but could not document their income traditionally because of available tax write-offs. These loans were also offered to other homebuyers with extremely complex financial situations. This makes the financing less burdensome for the applicant and lender alike.
Similar to no-doc loans are low-doc, or low documentation loans. These loans are often offered to borrowers who have nontraditional income streams, such as significant investment income. These loans typically focus on the applicant’s credit score, since tax write-offs can make a person’s income seem less than it actually is.
Who Typically Applies for No-Doc Loans?
People who most commonly apply for a 30 year no doc investment loan are recent immigrants, seasonal workers, and individuals who are self-employed or unemployed. Due to the lack of income verification, these loans are much more accessible than traditional mortgages for non-traditional workers.
No-Doc Loan Requirements
To qualify for a no-doc investment loan, you must provide a down payment of at least 10%. This is the industry standard for traditional mortgages and no-docs alike. Unlike a traditional loan, you only need to provide your bank statements.
In other words, you do not need to provide tax returns, W-2s, or pay stubs. There are no employment verification and no DSCR (debt service coverage ratio) requirements. There are also no seasoning requirements, and derogatory credit and past bankruptcies and foreclosures are okay.
Tips for Taking Out a No-Doc Loan
Since a 30 year no doc investment loan requires no income verification documents, some people are tempted to overstate their income so they can finance a larger, more glamorous house. However, if you finance a home you can’t afford, you will default on your loan and end up losing it.
Take an honest look at all fees associated with homeownership, such as property taxes, fire or flood insurance, and mortgage insurance. Also look at HOA fees, maintenance and utility costs, trash collections, and other related fees. Then, decide how much you can afford to borrow based on your income.
What Is a Hard Money Loan?
A hard money loan, also known as a bridge loan, construction loan, rehab loan, private loan, or bridge loan, is a type of financing that can be used to buy or repair an investment property. They are not usually offered by mortgage brokers or banks because they do not abide by typical underwriting standards. This type of loan will cover both the cost of purchasing the property and the cost to repair the property.
Benefits of a Hard Money Loan
A powerful negotiating tool when at the closing table to purchase a real estate investment property is the use of a few financing contingencies. With a hard money loan, you can receive your money much faster than with a traditional mortgage. Furthermore, this type of loan allows you to make repairs to your investment property without paying out of your pocket up front.
Schedule Your Initial Consultation Today
At AS-IS loans, we’ll work with you no matter what your situation. With over 30 years of finance experience, we have a team of professionals in place to guarantee you receive the capital you need. We approve financing within 24 hours, and you can close in as few as seven days. Whether you are interested in a 30 year no doc investment loan, a hard money loan, or another non-traditional loan, call us today at (800)-611-2747 to speak with a loan advisor and see what we can do for you.
