No Income Verification Loans

Finding an affordable mortgage can often be a trial for those borrowers who can’t prove their income. The best interest rates are usually only offered for conforming loans; i.e. loans that adhere to FNMA (Federal National Mortgage Association) lending guidelines. Therefore, you may find it difficult to find a good rate if you are self-employed or otherwise unable to verify your income.

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One option available to such borrowers is to take a No Income Verification Loan (NIV loan). Essentially, this is a loan that does not require proof of income. Instead, the lender requires only such documentation as relates to the credit report of the borrower, and the application itself. Lenders often advertise these as no doc loans.

No Income Verification loans typically come with a higher rate of interest than conforming loans. While they may cost more in the long run they are preferred by many borrowers as they can be processed much more quickly than conforming loans. This can come in especially handy for borrowers who own several rental properties. After all, if a borrower purchases a new property every few months it can become a chore to go through the same paperwork over and over again.

There can be pitfalls with NIV loans, however. While many lenders advertise the loans as no doc, it is often the case that they will request additional documentation as the application is processed. The best way to avoid this problem is by having a frank discussion with the lender before the application begins, identifying exactly how much documentation will be required. By outlining the rules of your No Income Verification Loan you can ensure that the process will run as smoothly as possible.