Investing in real estate or a business venture makes sound financial sense in the current political climate. The timely transfer of savings out of the volatile stock market and into more stable investment vehicles like rental property, fix & flip real estate projects, and other secured investments can help ensure your nest egg is ready to face whatever change may be headed your way. With a 30 year No Doc Investment Loan, real estate backed investments are a viable alternative once again.
What Is a 30 Year No Doc Investment Loan?
Since few people have the liquid capital to purchase an investment property outright, so outside funding must be obtained in order to proceed. The easy-qualify, No Doc and Low Doc loans favored by commercial real estate investors and business owners in the 2000s are no longer available through traditional lenders, but fortunately, small lenders in cooperation with private investors are still able to provide these alternative funding options.
The 30 year No Doc Investment Loan combines the relaxed documentation requirements of the classic No Doc loans with the extended repayment period of a traditional mortgage. Amortizing the loan over 30 years allows borrowers more breathing room to nurture and grow their investments without the specter of a balloon payment or hard loan deadline looming.
What Benefits Can You Expect From a 30 Year No Doc Investment Loan?
A 30 year No Doc Loan from AS-IS Loans has several advantages over a traditional bank-issued 30 year mortgage loan.
Expect a Speedy Application Process
With a 30 year No Doc Loan, the lender need not devote time and effort to sifting through reams of supporting documents to verify all aspects of a borrower’s income portfolio. There is no time wasted waiting for the loan application package to make its way through various departments so that each department may provide their stamp of approval.
AS-IS Loans can approve your investment loan application in just 24 hours, so you can get the capital you need and get back to business.
Expect Your Personal Details Will Remain Secure and Private
Banks and large-scale lenders are frequent targets of cyber attacks, phishing schemes, and lax employee security protocols that result in data breaches. These unintentional breaches have compromised the financial identities and credit scores of countless Americans.
In addition to the violation of privacy posed by the accidental data leaks, there is the intentional sharing, of financial and personal information with government officials, corporations, marketing agencies, and potential employers. The current privacy laws offer no substantive protections to prevent consumer data from being auctioned off to the highest bidder.
The application process for a No Doc Investment Loan does not require access to the intricate minutiae of your day to day financial practices, bank account balances, private savings accounts, or work ethic. The private details of your life remain private and under your control.
Expect a Loan With No Seasoning Requirements
Seasoning requirements are essentially a pre-determined length of time during which no new financial activity is permitted by an individual on a certain property. Seasoning requirements were initially created to help curb the explosion of fraudulent fix & flip loans, strawman purchases, and title or deed washing.
The current seasoning requirements for all prime mortgage lenders and loan processors are federally mandated, and individual lenders are required to abide by the imposed waiting period. This can be a serious impediment to success for investors who rely on a quick fix & flip real estate investment model or a short loan repayment period.
As a small company, working in cooperation with a larger network of private lenders from all over the world, AS-IS Loans is not required to abide by the federally mandated seasoning requirement timeline.
Expect a Loan With No Complicated Debt Service Coverage Ratio (DSCR)
Traditional lenders rely on the Debt Service Coverage Ratio (DSCR) to determine a borrower’s ability to meet existing debt obligations and pay the monthly payments on the proposed new debt. A borrower’s DSCR is calculated by adding up the total payment amounts on each financed property in the borrower’s portfolio and subtracting that total from the average income earned each month from rental income and any other income sources.
The lender is looking for a higher total amount of generated income vs. total expenditures for each month. A DSCR of 1.0 represents the break-even point where the income generated from all sources is equal to the amount that must be paid out each month to repay the debt for the properties.
How Is a Debt Service Coverage Ratio Calculated?
Most lenders require a DSCR of at least 1.25 before approving any new funding. The formula used here as an example is a drastically oversimplified version of the DSCR calculations commonly used by traditional lenders.
In an actual DSCR, the monthly expenses would include the monthly loan payments from all financed property as well as an estimated monthly maintenance and repair total, marketing costs, rental servicing fees, wages paid to staff or property management services, and the interest on all outstanding balance.
What Costs Can You Expect From a 30 Year No Doc Investment Loan?
For borrowers who are able to make the monthly mortgage payments each month, the higher interest rate and the resulting expense is easily recovered from the profits generated by the investment property.
Private lenders do not require documentation to verify the origin or amount of income a borrower earns, though they do generally require a general statement of employment. Lendersdo rely on alternative indicators to assess the relative risk of extending a loan to a particular borrower. Most lenders will focus primarily on the borrower’s credit score and the property equity available to secure the lender’s interest in the loan.
For well-qualified borrowers with excellent credit and a substantial down payment, the cost of a 30 year No Doc Loan from AS-IS Loans can often be reduced to a point that is only marginally more expensive than traditional mortgage loans.
What Type of Documentation Requirements Can You Expect?
Even a No Doc loan requires borrowers to provide some basic assurance to lenders. When applying for a 30 year No Doc loan through AS-IS Loans, you should expect to provide some type of documentation that proves you are who you claim to be, and you have some source of income supporting your ability to make the required monthly payments to repay the loan.
Expect to Prove That You Are Who You Claim to Be
You will need to provide at least one of the following official documents to verify your legal identity and your legal right to reside, own property, and conduct business within the United States:
- Current driver license or state identification card
- Photocopy or a scanned image of both sides of your social security card
- Current VISA (if not a US citizen)
- Passport (foreign nationals)
NO Income Documentation Required.
Expect to Provide:
The lender is simply looking for items to ensure the property is secured and insurance. Here is a list of some of the items that will be requested
- Evidence of Property Insurance
- Clear and Marketable Title
- Corporation Documents (if purchasing or refinancing under a corporation)
- Tenant Leases
Find Out More
Now that you know what to expect from the No Doc loan application process, you are ready to take the next step to secure the funding you need. Contact AS-IS Loans to learn more about our 30 year No Doc Investment Loan. Our AS-IS Loan Advisors will be able to provide answers to any questions you may have, and our network of lenders will help you secure the investment capital you need.