If you look up home loans on Google, you will probably find three major categories: No income verification loans, traditional loans, and hard money loans.
A no-income verification loan has several perks for both borrowers and real estate investors. On the other hand, traditional loans are given only by established financial institutions like big banks. They often come with several guidelines and require you to file a lot of paperwork.
If you don’t have the energy to deal with all that stress, loans with no income verification might be a perfect choice.
Understanding No Income Verification Loans
Firstly, no income verification mortgages are provided only by private money lenders. They are lenders who offer loans that don’t need you to verify your income. You can keep your salary, bank, and tax statements regarding your assets or income and any other cash flow information at home. It’s a perfect choice for all borrowers who are self-employed or own a business. Since these people may not have a stable cash flow, applying for a no-income check loan is easier. No income verification mortgages have three critical qualifying factors, which include:
- Your credit history and a sound credit score (anything higher than 650)
- Multiple liquid assets
- Past real estate investment loans experience
If you meet the criteria, you can quickly access loans with no income verification. Though getting the loan is simple, it’s not the only advantage of choosing a no-income verification mortgage.
Lower Down Payment
Another advantage of getting loans with no income verification is that they come with significantly lower interest rates and fees than hard money loans. These loans come with a higher maximum LTV ratio than other traditional loans. Generally, traditional loans have a lower loan-to-value ratio (LTV) of 70%, whereas no-income check loans can go as high as 85%. Higher maximum LTV, along with lower interest rates, make no doc mortgages an excellent deal for people who are self-employed or own a business.
It is a great advantage for borrowers as the lender takes more risks with higher LTVs, and you, as the borrower, can put down a lower down payment for the property. It’s a good option for people who don’t have a lot of savings. You might not be able to manage a lower LTV since you cannot put down such a substantial amount upfront. While most prominent financial institutions like banks don’t usually offer a higher LTV and demand larger down payments, private lenders can be more flexible with a no-income verification loan.
Fast Access to Funds
Here is another advantage of no doc mortgages that most people don’t realize. Since loans generally require borrowers to have some experience, you may get the loan for several different reasons, but it will not be your first property. As long as you are not investing in your first property, you know what a good deal is. If you are a seasoned real estate investor, you are probably always on the lookout for good investment opportunities.
When you find a good deal, the most important thing is how fast you can close the deal on the property. As soon as people discover a two or three-week deadline, they often think it is a lost cause since they don’t have enough money in the bank. However, with the help of loans with no income verification, you don’t have to pass on such opportunities. When you land a good deal with a tight deadline, you can access no doc mortgages in time. Getting approval for such loans may take as little as two or three weeks. With this lending, you get to enjoy a quick turnaround process.
They Are Pretty Easy To Qualify
Most loans with no income verification are ideal for people who can’t qualify for traditional loans or hard money loans since they can save a lot of money. It is also much less effort and comes without all the extra stress and paperwork. If you have been denied other qualified mortgages, you must look for a private money lender with tons of experience working with non-qualified mortgages. Remember, all you must provide is information about your credit history, show liquid assets, and past real estate investment loans experience.
Have More Questions? Contact Real Estate Funding Solutions Today!
Do you have a real estate property in mind? Do you wish to close a deal quickly? If yes, the Real Estate Funding Solutions team is here to help. We have years of experience dealing with real estate investments and can help you get ideal loan terms in no time. Moreover, our professionals will stay by your side throughout the process, ensuring you have everything under control. Call us today at 855-913-8637 `to learn more about loans with no income verification.