Last Updated on
Most people are not aware that there is such a thing as a No Income Verification Home Loan. They associate getting a mortgage with lining up employment letters, most recent pay stubs, tax verification documents and several months’ worth of bank statements in addition to putting together a down payment and maintaining a high credit score. After all, banks want to know whether there borrowers can make their loan payments over the life of the mortgage.
However, there are a lot of people who have a significant down payment saved up in the bank and have a nice monthly income, more than enough to afford the monthly payments on a mortgage. However, with no income verification on a monthly basis through a third party getting a home loan is tough. Maybe they are self-employed, and their monthly income varies significantly as a result. When their businesses are doing well, they have a windfall coming in during those months, but things can get a little lean during months in which business slows down (but business costs remain at a constant level). This group of people includes successful doctors and dentists; it also includes people who are sales associates paid on commission or who have other issues verifying income for a home loan.
These clients obviously can afford to buy a house, but they can’t get financing the conventional way. As a result, they need a mortgage that does not require income verification to get a home loan. Amansad Financial has helped many people in this situation by connecting them with a private lender.
A No Income Verification Home Loan is based on the value of the property rather than the creditworthiness of the borrower.
Private lenders are already aware that you can’t qualify for a traditional mortgage, but they also know that you may well have the means to pay interest on a note that will bring them money, so they lend you the money. They know that, when the loan comes due after a year or two, you will either renew or replace it with a traditional loan from a bank. In the meantime, you’re paying higher interest rates, but you’re also building equity and living in the house you wanted, so there are some advantages.
The key with a private loan is the property appraisal and how much equity remains after all mortgages are registered. A professional appraiser evaluates the value of the property, and that number becomes important. If the LTV (loan to value) numbers fall in the proper range, which means that you are not taking out a loan that is large enough to threaten your ability to satisfy the loan through sale of the property in case of default. One thing that borrowers always need to know is that many private lenders have their own approved appraisers that they are comfortable with and will in many cases obtain a second opinion from a trusted realtor in that area. In addition, if working with a broker, it is best to allow the broker to order the appraisal as some lenders do not like when a borrower orders own appraisals as it may leave room for borrower interference.
Does employment or income matter in order to qualify?
A common questions asked by potential buyers and homeowners is “Does Employment and Income Matter to Qualify”. The answer “Each file is reviewed on its’ on merit”. However, one thing to make note off is that when the property is in a metro market and the equity exceeds 35% after all mortgage registrations; income verification is not very important. For Rural properties, there’s no definitive ratio to work from because more variables relating to property type and marketability come into the equation. In some cases where the equity is very significant, a borrower can have no-employment or income, and the loan a structured so that payments are made in advance and allow an individual to find employment. More information on this type of mortgage can be found on our no payment private mortgage.
Private lenders are generally willing to offer interest-only loans or amortize over 20, 25 years and up to 35 years in some cases. However, they want their money back within one to two years in most cases. Some lenders offer renewal options, while others do not — it depends on what plans they have for the money they lend you before it comes to you.
One thing to remember is that private mortgages will come at a higher interest rate than traditional loans. Even though you may have 30 to 40 percent saved away and might have a successful business of your own, you still represent a higher level of risk than a person with an ironclad employment history with a third-party firm. However, you’re only paying the terms of this note for 2 or 3 years, and then you get to replace it with a traditional bank mortgage, provided you’ve been able to use the time during your private mortgage to make your credit score more like the bank wants it and to build a history of regular, reliable income that the bank will trust.
Amansad Financial has connected many individual borrowers with private lenders. Some of the private lending sources are individuals, while others are companies or organizations. Still others are mortgage funds seeking to elevate their returns by taking solid prospects on. The rising interest rates motivate individuals and entities to take on mortgages as an investment, because the last thing that people are likely to default on is their mortgage payment.
If you think that a private mortgage might be the ticket to help you get the mortgage you want on the house you’ve set your heart on, create a file with Amansad Financial today. Our mortgage specialists will discuss your personal situation with you and make recommendations as to whether you should purchase a house and whether to pursue a private mortgage or No Income Verification Home Loan. Give us a call today or get pre-qualified online!
Refinance With No Income Verification
Refinancing a loan often makes sense for a number of reasons and would be way easier in some cases without Income Verification. Maybe you signed on for a loan at an interest rate that is several percentage points higher than the rates available now. Before the housing collapse of 2008 and 2009, interest rates were a good bit higher, and if you refinance now while rates are at rock bottom levels, you may be able to get a good deal. Maybe you are paying mortgage insurance because you initially took out a high ratio loan and want to get rid of that extra expense. However, if you want to go through a traditional lender to refinance, you still have to go through the normal channels: credit score and income verification.
Refinancing Without Income Verification
So what do you do if you’re a successful self employed individual? Or if you had to take several months or even a year off work to go through leukemia or cancer treatments? Or what if you recently came into a bequest that will help you pay for some of the loan but not enough, so you want to refinance the rest, but your income history is up and down? All of these can make getting refinancing through traditional channels difficult. Amansad Financial has helped many of our customers come through similar situations, and we have access to a number of different methods that help our clients find the refinancing that they need.
No Income Verification Refinance
One of the most common ways to get no income verification refinance loans is in the form of a private loan. This is a great option if you can structure the deal so that LTV (loan to value) ratios stay at or below 65 percent. If the home you want to refinance is located in a metro area has an appraisal value of $500,000, you would have a difficult time finding a private loan for more than $325,000 (65 percent of the value). Some private lenders will go as high as 85 percent LTV in urban markets, which would take your potential loan (including existing principal) up to $425,000, if you are willing to provide income verification through such means as tax returns, pay stubs, bank statements or other means. However, if you have built up enough equity such that your remaining mortgage balance on the principal is $325,000 or less, or if you have some savings on your own to put into your existing loan so that you can take the balance down below $325,000 before securing the private loan, then you should be able to execute this deal without any problems.
To find out how refinancing without income verification can help your own situation, give one of our specialists at Amansad Financial a call today!