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no-doc loan: A mortgage loan that requires no supporting documentation to complete during application. The borrower does not need to disclose assets or income; however, the interest rate associated with the loan is typically higher than full or reduced documentation loans.
A no-doc mortgage is an extinct mortgage product that does not require mortgage lenders to document the borrower’s income or assets. No-doc mortgages are illegal today because they violate the requirement that lenders must verify the borrower’s ability to repay before approving a mortgage.
Inside Mortgage Finance’s Cecala said he believes underwriting of the loans had grown too loose by the end of last year, and that even some subprime borrowers were getting so-called low-doc or no-doc.
"NO DOC" loans had been around for years, and served a niche market for the self-employed, commission, and tipped income home owners. Because of their additional risk, they came with higher interest rates, bigger down payments, and generally were only available to self-employed people with a minimum of 2-years provable self-employment history and trouble documenting their true income.
A No Doc loan or Low Document loan provides increased ease and privacy when getting a mortgage in exchange for a slightly higher rate. In the past, anyone could apply for a no doc loan but now if it exists it would be for self employed borrowers.
The no documentation mortgage (No Doc) has no supporting evidence of a borrower’s income. Instead, the loan realizes based on a declaration confirming the borrower can afford the loan payments. These mortgages are unregulated and do not meet the Consumer Credit protection act requirement to verify the borrower’s financials reasonably.
get pre qualified for mortgage Getting pre-qualified for a mortgage is an informal way for you to get an idea of how much you can afford to spend on a home purchase. mortgage pre-qualification is an important first step for anyone who is considering buying a home and is unsure if they are financially ready.bad credit mortgage interest rates current mortgage rates | Bankrate – Lenders charge interest on a mortgage as a cost of lending you money. Your mortgage interest rate determines the amount of interest you pay, along with the principal, or loan balance, for the term.
No doc loans are a greater risk for mortgage lenders; the market crash was in part due to risky no doc loans defaulting. The no doc refinance products have been performing better in recent years and that’s a good thing. Without a standard set of income proving documents, you will likely have a higher interest rate than a regular, full doc loan.
What is a "No Doc Loan?". Each of these programs eliminates the need for some of the traditional mortgage loan documentation, but none of them is a real no doc loan requiring just appraisal, credit and clear title. They all require excellent credit. MyMortgageBanker.com is a division of a federally regulated commercial bank.