| You may have heard of a no-doc loan, but you might | | | | does not mean no documents. The name is a |
| not know what it means. No-doc stands for no | | | | misnomer. The borrower has to provide limited |
| documentation. It is a loan that does not require | | | | documentation. |
| documentation to prove income or employment. | | | | Usually when a person applies for this type of loan, he |
| However, this type of loan does not mean that no | | | | should be prepared to pay a higher rate of interest |
| documents whatsoever have to be provided. There | | | | compared to traditional mortgage loan. The reason is |
| are some documents that have to be given to the | | | | that he will be perceived as a borrower who is at a |
| lender in order to get the loan. | | | | higher risk of defaulting. |
| Most of the times the people who apply for no-doc | | | | The reason people opt for this type of loan is because |
| loans actually qualify based on their credit scores. This | | | | they have no choice. For instance, you were |
| is because they made an effort to pay all their debts | | | | unemployed the previous year, but this year you have |
| and financial obligations on time. So, when they apply | | | | a good job to be able to think about buying a house. |
| for a loan to buy a house, they qualify immediately. | | | | The only option for you would be this type of |
| These people have to go through the usual appraisal | | | | mortgage loan. |
| and verification procedures in order to get the loan. So, | | | | Once you have documented income, this type of loan |
| while they will not have to give proof of the amount of | | | | can be refinance for a better and more competitive |
| income, they would still have to provide some proof | | | | interest rate. |
| that they have a job or business. So, no doc actually | | | | |