Can You Still Get A No-Doc (Stated Income) Mortgage for Real Estate?
In 2014, the US Consumer Financial Protect Bureau implemented new rules that prevent almost all stated income loans, sometimes called no-doc loans, by traditional mortgage lenders. Of course, even before these rules were implemented, it has been tough to find a lender who will waive the traditional long application process and process a stated income loan.
According to ConsumerFinance.gov, banks and finance companies that make Qualified Mortgages (QM) must verify that potential borrowers can make loan payments and should be able to keep making them for some time in the future. Typically, this means verifying income, assets, credit scores, other debt, and whatever else they consider relevant. This means that most potential borrowers can expect get asked for even more documentation, and it also means the process could take even more time.
These are the two important new concepts that could impact future home loan borrowers:
- Ability to replay: Traditional QM lenders have to verify that the borrower has the ability to pay, and they may consider factors like the debt-to-income ratio. Typically, this must be below 43%, and less is better.
- Qualified Mortgages: By definition, qualified mortgages cannot include many of the features that used to be very popular in the past. For example, they cannot make interest-only loans or any loans that do not have a sufficient monthly payment to cover both the principal and interest.
These new rules probably do protect a certain type of borrower that never should have gotten a home loan in the first place back in the old days. However, many legitimate, responsible, and credible borrowers need a way to get a fast property loan, and some of these individuals and businesses need a loan that can get processed very quickly. So, where can you find today’s no-doc loans? You can find them at hard money lender like Sterling Investor Capital.
Is There A No Doc Mortgage Alternative Today?
As an alternative to no-doc or stated income loans, many borrowers turn to hard money loans. The application for a hard money loan is very simple. These loans are not based upon credit scores, W-2s, or any traditional debt and income documentation. They are mostly made based upon the value of the property that will end up securing the debt. Because very little information is needed, borrowers can get answers within hours or days, and they do not have to wait weeks or months as they do for a traditional loan to get processed.
Typical hard money cash borrowers include:
- Commercial investors who need to purchase property before financing arrives.
- Homeowners who need to move into another house before they can sell their old one.
- Real estate investors who wish to buy property to rent or rehab.
- Any property owner who is having problems with current financing.
How to Get a Hard Money Loan
If you are interested in getting your home or commercial processed, simply contact us about hard money loans right away. We may need to gather some information about the value of the property, and then we can give you a prompt answer. If you have questions, please call: 713-784-7676