Are you considering a mortgage that does not require you to do anything but apply and have great credit? If so, then you might not know what type of no doc mortgage interest rates you should be willing to accept. Here is a rundown of what you are getting yourself into, why you would use this type of loan, and what type of rate to expect.
First, a no doc mortgage is basically a mortgage that only requires a credit score. They will not be worried about your income at all, but in some cases they will ask you to sign a statement saying you make so much money. Either way this type of mortgage has no income requirement, but you better have a very good credit score or you will struggle to find someone to approve you for this mortgage.
Second, If you are a small business owner, a tipped employee, or someone that gets paid in cash, then you will want to consider a no doc mortgage because you will struggle to prove your real income. This happens because tipped employees rarely claim even half of their tips, business owners have expenses that make it difficult to prove what they really make, and anyone being paid cash has nothing to prove their real income.
Last, you should expect your no doc mortgage interest rates to be higher than a conventional mortgage because it is a bit riskier of a loan. You should be willing to accept a rate that is about 1% to 2% higher than what you would get on a regular mortgage. Any higher than this and you are getting ripped off and should say no right away.
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No Doc Mortgage