No income verification home loans are usually made available to self-employed people and you need to make a significant down payment
There was a time when no income verification home loans were easily available. Anyone with a specified credit score could benefit from them. Many people took advantage of these loans but were unable to repay. Therefore, lenders, faced with a large number of defaults, no longer offer no income verification home loans as they have high risks associated with them.
Having said that, you can still find some lenders where you can get a mortgage loan without income proof. But, it is still difficult to get these loans. No income verification home loans are usually made available to self-employed people and you need to make a significant down payment. In addition, you can get the best no income verification mortgage only if you have spectacular credit score.
Usually no income verification home loans or stated loans, as they are also known as, come with higher interest rates. So, if the normal applicable interest rate is say 6%, you may be charged anywhere between 10 and 12% for a mortgage loan without income proof. This increases the amount that you need to repay as the monthly installment, making the loan unaffordable.
It is a normal temptation to overstate your income when applying for a no proof of income mortgage as there is no verification of the stated income. However, remember that you will need to repay the loan amount. And if it is beyond your limits, you will end up defaulting on the loan. Therefore, to avoid such an eventuality it is best to be honest with your earnings. To this end, review all the applicable costs associated with the no proof of income mortgage. These may include taxes, closing costs, other fees, insurance, maintenance, utility costs, and so on.
In some cases, it turns out that opting for a traditional loan over mortgage loan without income proof makes more sense. This is because they have lower monthly repayment amounts making them more affordable, saving you thousands of dollars over the life of the loan. You may need a lot of documents for a standard loan but it will be worth the effort as it will help you save significant amount of money.
In order to ensure that you get the best no income verification mortgage, compare such a loan with a normal loan. If you face difficulty, seek assistance from a professional broker to make the decision making process easier.