What is a No-Income Verification Mortgage Loan?

A no income verification mortgage loan is a loan that can be approved without any proof of income on the part of the borrower. No income verification mortgage loans are best for people who work on a commission or those who are self-employed and do not have any way to show a steady flow of income.

The Details

No income verification mortgage loans have higher interest rates because they pose higher risks to the lender. Because no proof of income is needed, the likelihood of a borrower defaulting is high.

Another name for this type of loan is a "liar's loan." This name refers to the ease with which a borrower could get away with lying about his or her situation on an application for a no income verification loan. Although lying may be easy, it is not encouraged.

When you apply for a no income verification mortgage loan, you give the lender the right to review your past two income tax returns. This is a way for the lender to see if you are or are not lying about your income.