Let us help you navigate how to get a mortgage with no income verification. Obtaining a mortgage is hard enough without adding uncommon elements, such as a lack of traditional income, to the list. There are plenty of alternative mortgage solutions out there for people who are unable to provide traditional sources of income.
Work with a reputable mortgage broker
One of the best ways to get around the traditional income verification process is by finding a reputable mortgage broker. Mortgage brokers tend to be well-connected among lenders and may have options that you cannot access on your own. Moreover, mortgage brokers can show you what you need to obtain a mortgage without income verification. This will better prepare you for seeking a mortgage now and in the future.
Choose the right no-income verification loan product
When you are choosing a loan that does not require income verification, choose wisely. There are several basic loan types that fall within this category. A stated income stated asset loan is one rendered without verification of the borrower’s income or assets. These were popular during the subprime housing crisis of 2008 and are no longer used in most real estate markets.
Many mortgage lenders today have a stated income program that allows borrowers to use bank statements to show their income.
Equally, a low-income or no-income mortgage offer is supported by the home a lender is lending on. Unlike your bank or credit union, alternative mortgage lenders can look beyond that.
Also, the more documentation you can provide, the better a lender your mortgage broker will be able to get approval through.
Offer whatever documentation you do have
No-income verification loans do not let you off the hook entirely where documentation is concerned. You still have to show the lender that you can repay the loan using whatever other paperwork you have available.
This includes tax returns, home equity and cash flow. Some mortgage lenders may also accept bank statements and other financial documents showing that you do have income. You may have the money to support the monthly payment obligations but simply lack proof of income required.
Ask your mortgage broker what documents they can accept to help tell a story about how you make an income. This ensures that if a lender offers a pre-approval, you are prepared to begin the application process.
Make a large down payment
Depending on your financial circumstances, another way around the income verification component of a mortgage loan is a hefty down payment. Borrowers who come up with large down payment show lenders they have enough money to handle the responsibility of a mortgage.
The standard down payment for a home is 20%. If you can exceed that to circumvent the income verification component of the loan, you will increase your chances of approval.
Mortgage lenders become more comfortable if you are able to put down a larger down payment. The more skin in the game you have the more likely you are to secure an approval.
Prepare for a higher interest rate
The challenge of a no-income verification mortgage is that you are asking the lender to take a gamble on you. Lenders tend to charge a higher rate if they are unable to confirm your annual take-home income.
This may mean that you will receive a higher rate of interest initially, due to being a high-risk borrower.
Check your credit before applying
Credit is a major factor if you are seeking approval for a mortgage without income verification. Therefore, before you even apply, do a quick check of your credit. Make sure that your credit score is as close to good or excellent as possible.
Pay off any past due bills, make sure that your debt to income ratio is within the recommended range(44%). Talk to your mortgage broker about any negative remarks on your credit report that you think might affect you negatively.
The better your credit score, the better your chances are of getting approved for a mortgage loan even without traditional income.
Be honest about your financial situation
While alternative mortgages can be approved without evidence of income, it is important to consider your plan to repay the loan. It is important to have a plan in place that highlights how you plan on making the monthly payments.
In fact, some of the standards of no-income verification mortgages are even stricter than traditional loan packages. As such, this is not necessarily a bad credit mortgage option. Those that apply for a loan without income verification must be prepared to show they are worthy borrowers through other means.
Mortgage loans that do not require income verification are ideal for those who are self-employed or work on the contract. In a word, this type of income can be very sporadic and hard to prove. Alternative mortgage lenders make for a great alternative because they understand just that.
Getting a mortgage can be stressful because of the complexities involved in the process. However, if you gather as many documents as possible, work with a reputable broker, it is possible to get mortgage approval.
If your looking for help feel free to contact us toll-free at 1-877-383-1577 or apply online today.