No Doc Home Loans

One of the many financial problems faced by the self-employed has always been in proving their income when applying for loans and credit. I should know I’m self-employed myself! It can often be highly frustrating to prove your income, especially when that income stream can fluctuate wildly and you don’t receive a regular pay check.

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However, there are options available to those who find it difficult to verify their income. Many lenders now offer no doc home loans to people who can’t provide proof of a regular income. In this article we’ll discuss the pros and cons of these loans.

A no doc home loan is essentially a loan that doesn’t rely on proof of income documentation in order to be approved. A borrower would only have to prove that they have a good enough credit score in order to qualify for a no doc home loan, so they can come in very useful for the self-employed.

The average no doc loan requires only a social security number and the basic property details in order to be approved. Provided the borrower has good enough credit, the loan may be approved with no more information required. While these types of loans are most useful for the self-employed they are also favored by those who prefer to keep their personal information private.

Unfortunately, this convenience comes at a price. The typical no doc home loan will have a higher interest rate than a full doc loan, as the lender must take a greater risk in lending to a person with unverified income. The borrower must decide whether the convenience of this type of loan outweighs the additional cost and that can be a difficult question to answer.