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The Low Doc Loans Could be Your Mortgage Alternative

Todays Date: October 20, 2018

Buying a first home is a daunting project, one so complicated that many decide to forego it altogether. But this is not the answer, especially because most people have the means to purchase their own home. However, there is a process involved that everyone must follow and which involves a great deal of paperwork.

Among other things to qualify for a mortgage you need documentation regarding your income and assets. But what if you work for yourself! Often in these cases you can’t produce many of the documentation required as proof of income. In this case the mortgage lender needs to find a low-documentation also known as low doc loans for you.

As with other documentation options for low doc loan come in a variety of forms. These are called: No Ratio
Stated Income Stated Asset
Stated Income
And Stated Asset

Reasons for Low Doc Loans
Banks can realize that people who worked independently or for themselves, but where businesses too small to have payroll and HR systems, they created the low doc loan which required less income information from the borrower. This type of loan is ideal for people who find themselves in the following situations:

Self Employed – Those who run a one to two person business and who declare a lower income than what they really make.
New Employees
– Young people who are just entering the work force
People who want to keep their Privacy
People who have income streams that are undocumented or unacceptable by traditional lenders

How to Qualify for a Low Documentation Loan
Getting this type of loan is not as easy as getting the traditional mortgage. In most cases a lender has to see your true income and feel comfortable in your ability to repay it. Moreover, you will need to have good credit and a high income to qualify. Liquid assets and a good debt to income ratio can help you qualify for this low doc loan type.

Getting Approved – This is somewhat more difficult to qualify for loan, you should first find the right lender before proceeding to finalize the house you want. Fortunately there are lenders who do offer solutions for people finding themselves in this situation. When you qualify you can expect a lender such as this to offer up to 80 percent of the property value.

Before deciding that you don’t qualify for any type of low doc home loans, talk to the experts or a mortgage broker to see if you meet the qualifications for this type of loan. Each lender offers different approval rates, and requirements for this type of loan.

Once Approved – If your loan approved instead of relying on the loan limit being offered you should analyze what you really can afford for the mortgage they get. Be aware that it is very easy to over commit to a loan that is a little higher than what you can really afford.

Article Source: http://www.ideamarketers.com/?articleid=3355870&CFID=196987548&CFTOKEN=66149408

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