The Advantates of No Doc Home Loans

No doc home loans have become very popular with certain lenders and home buyers. Critics say that no doc home loans are too risky and should be abandoned. However, from a home buyer's perspective, they can really come in handy sometimes. There are many aspects of a no doc home loan that make it attractive from a buying standpoint. Here are a few advantages of no doc home loans to consider if you are in the market for a new mortgage.

Will Not Verify Income


The very essence of a no doc home loan means that the bank is not going to verify anything about your income. They will not verify that you make a certain amount of money to fit their ratios or even call to see if you really have a job. They will give you a form to fill out that asks how much money you make. You can fill in whatever number you want and they have to believe you.

This system is great for self-employed people as their income can often be sporadic. They may receive income from several different sources and some of it may not be easily verified. Therefore, if you can find a loan that does not make you verify anything in this regard, it can be to your advantage. Self-employed people have traditionally had a hard time finding mortgage loans. No doc home loans may be the answer that many of them are looking for. 

Faster Processing


When you apply for a no doc home loan, you will immediately notice how much faster the process goes when compared to other types of traditional mortgages. A big part of the process of approving someone for a loan comes during the verification process. The bank usually has to look at all of your W-2's, pay stubs, bank statements, and related documents. They will call your employer and talk to them about your position with the company. While it may seem like a simple task, these things take time. When the bank has many loans to process, there are only so many hours in the day to do all of this. Therefore, your loan approval may be delayed as a result. With a no doc home loan, the main thing that they will be looking at is your credit score and the value of the house. This makes the process go a lot faster than normal because there is less to go through. 

Eliminate Ratios


When you use a no doc home loan, you can throw all of the complicated ratios that borrowers are usually subject to out the window. Most of the time, you will have to fall within a very strict debt to income ratio in order to be approved. Since you control what you put on the form for your income, you can avoid this problem. This will allow you to buy the house that you believe you can afford instead of relying on what some loan officer behind a desk thinks.