"NO DOC" MORTGAGE
A
"no-doc" mortgage is a mortgage loan that a bank makes to a
borrower with no documentation. It is like a signature loan
for a home and requires top tier credit scores (usually 680 or above)
and a significant down payment (10-20%).
In exchange for
not having to give documentation to the bank, the borrower must pay
higher fees and a higher rate to compensate the bank for the added risk
of not verifying the borrowers income or assets.
These are often used by self employed borrowers -
many of whom cannot qualify traditionally due to low net earnings
reported to the IRS. They are also used by investors who cannot
qualify due to insufficient income and can result in a financial strain
to the borrower if not properly planned for.
PLEASE NOTE: Due to the current mortgage market, these loans are no
longer available.
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