Basic Guide to No Income Verification Mortgage 2023

Basic Guide to No Income Verification Mortgage 2023

Table of contents

Are you looking to buy a home with a home loan but face challenges when it comes to providing proof of income? Are you self-employed and not receiving traditional pay stubs and W-2s? If this is the case, you may feel as though buying a home is out of reach. However, there is good news. Many lenders offer what is called a no-income verification mortgage and it may just be the solution you are looking for.

Here we offer a comprehensive guide to this non-traditional mortgage and how it can help you achieve home ownership.

Key takeaways

  • Learn what a no-income verification mortgage is.
  • Understand the pros and cons associated with a no-income verification mortgage.
  • Explore the different no-doc loans available and what they mean for you.
  • Learn what qualifications are necessary for no-income verification mortgages.

What is a no-income verification mortgage?

When you hear the term “no-income verification mortgage,” you may assume that these loans do not require income verification at all. The fact is, however, that proof of income and assets is still required, but the traditional method is slightly different.

When applying for a conventional mortgage, borrowers must show proof of income and liquid assets to the mortgage lender. In these cases, the standard income documentation includes regular pay stubs and W-2s. But what happens if you do not have these items? How do you show proof of income and qualify for a mortgage?

A no-income verification mortgage does not simply take your word when it comes to your net worth. Instead, this type of mortgage allows for non-traditional income documentation, which can include things like bank statements, tax returns, pensions, and investment accounts. They are a great option for self-employed individuals, real estate investors, private contractors, and small business owners.

How does it work?

With a no-income verification mortgage, also known as a no-documentation loan, borrowers must still produce income information that shows the loan officer that they have the ability to pay back the mortgage. Unlike traditional mortgages, borrowers can provide many different third-party records to provide this proof of income and assets. This can include bank statements,

No-income verification mortgage: Pros and cons

When deciding if a no-income verification loan is right for you, it is important to consider the pros and cons of this mortgage type.

Pros

  • No borrower’s income documentation is required
  • Your assets may be enough for approval
  • Great for self-employed borrowers or investors

Cons

  • Higher down payments required
  • Higher interest rates required
  • Higher credit scores required

Types of no-doc loans

When it comes to no-income verification loans, lenders can offer several different types of loans. Each of these loan types has its own individual requirements and your lender will work with you to determine which one best meets your needs. Some different loan types include:

  • Stated-income, stated asset (SISA): This loan is only available for investment properties and does not require the verification of income or assets. After the housing crisis, federal legislation banned this type of no-doc loan for owner-occupied homes and primary residences.
  • Stated income, verified assets (SIVA): Also known as a bank-statement loan, the SIVA allows for a stated income loan without verification and only uses your bank statement for asset verification.
  • No-income, no-assets (NINA): This is a loan type limited to real estate investors that are purchasing rental property that will provide rental income to repay the loan, so no income information is required. There are not many lenders that offer this type of mortgage.
  • No-income, verified assets (NIVA): Similar to a SIVA loan, except there is no statement of income, and income or employment is not considered at all.

Eligibility and requirements

While a no-doc mortgage means you don’t need to provide traditional proof of income and assets, it does mean that lenders will take additional precautions to ensure that you are financially responsible in order to reduce their risk of borrower default. In order to do this, the eligibility requirements are often higher than those lenders offering traditional mortgages. The basic requirements for a no-income verification loan include:

  • A credit score of 700 or higher
  • The ability to make a large down payment, often 20-30% or more
  • Provide documentation that shows your assets and income
  • Willing to pay substantially higher interest rates for the life of the mortgage loan

No-income verification mortgage vs. other mortgage types

Loan Requirements No-Income Verification Conventional Loans FHA Loans
Income Documents Required? No Yes Yes
Credit Score 700 620 580
Down Payment 20 - 30% 3.5% 3%
Interest Rates Higher than traditional mortgages Lower than no-doc mortgages Lower than no-doc mortgages

Should you get a no-income verification mortgage?

Deciding whether a no-income verification mortgage is right for you depends on a number of different factors. If you are self-employed, a business owner, or a real estate investor, where easy income verification may pose a challenge, then this mortgage type may be the right option for you. However, you must also determine whether or not you have a sizeable amount on hand for the required down payment and if you are willing to pay the higher mortgage rate for the life of the loan. In many cases, this loan type may be the only option you have available to purchase the home of your dreams.

Choosing the best mortgage option for your needs

As a self-employed individual or business owner, a no-income verification mortgage may be the only loan option you have available when it comes to purchasing your new home. While you may still be able to qualify for a conventional mortgage with detailed financial records and information, it can extend the closing time while the information is verified by the lender. However, you can benefit from the lower down-payment requirements and interest rates.

Picture of Jacquelyn Sublett
Jacquelyn Sublett

I love teaching and writing on real estate, finance and mortgage topics. I find it fulfilling hearing stories of first time home buyers who we have helped with the home buying process. Writer for the Hero Homebuyer Programs™

Connect with the Author:

Recommended Posts

What Our Buyers Think

Jules S.
Read More
"5 star service is what you will get when you work with him!ᅠ Not only does he know his product like no other, he makes a special point of communicating throughout each transaction and his follow up skills are unparalleled. Perhaps most importantly, he delivers on his promises!ᅠ Give him a try for your mortgage needs.ᅠ You will not be disappointed!"
Jeremy H.
Read More
"An outstanding job handling refinances.  One of those knowledgeable, straight-shooters - which is really appreciated when you're shopping for a home loan. He can answer a million of questions with ease.  Looking back at the responsiveness, he was outstanding and you can do everything he suggested."
Jaina D.
Read More
"You can rely on them, very professional and quick in responding to your queries. He is very friendly and makes sure we understand the process and keeps us posted on the status of our loan. His efforts are greatly appreciated."
Eshawn W.
Read More
“By far the best lender we’ve worked with. Got us the best loan amount than any other lender. He worked with us hand in hand, he is professional, and he made the process enjoyable.”
Jaina D.
Read More
"You can rely on them, very professional and quick in responding to your queries. He is very friendly and makes sure we understand the process and keeps us posted on the status of our loan. His efforts are greatly appreciated."
Cass Z.
Read More
“I called looking for information about the process of applying for a mortgage/refinance and am just blown away with how helpful the information I received was!”
Stephanie F.
Read More
“I have hope because of you for making my home ownership dream come true. I feel such a connection with you and am excited to work with you. Have an amazing day!”
Rachel S.
Read More
"Highly ethical, attentive and helpful! A fantastic combination of personable and hard working. He makes everyone feel important and understood."
Cliff S.
Read More
“Hands down the best mortgage professional I’ve worked with in 20 years. Knowledgeable, honest, reliable and above all an outstanding communicator.”
Jose A.
Read More
"He worked on getting the lowest rate and kept me informed on each step of the process from the beginning to closing. Thank You!"
Nicholas H.
Read More
“Thank you for your prompt help and AMAZING assistance. Hands down, best lender I have ever worked with. Top notch!”
Tiffany
Read More
“I would be 100% interested in working more with you! You have proven to be an amazing lender”
Sandy C.
Read More
“Absolutely the most knowledgeable, friendly and honest expert I’ve ever worked with!”
Steve R.
Read More
"A pleasure to work with. He was very prompt and courteous with his responses and genuinely cares about the clients he works with."
Kevin H.
Read More
"Professional, responsive and honest assistance with the whole refinancing process from beginning to end."
Previous
Next

We help you reach home ownership.

No catch. No hidden fees.

Have you served in the military or your community as a healthcare provider, teacher, or first responder? Are you a member of your local union or work for your city government?

Are you looking to buy a home but don’t know where to start when it comes to finding your best home financing options?

At Hero Home Programs™, our teams are dedicated to helping community heroes like you through the home purchasing process by finding the best grants, rebates, and loans in your area in order to maximize your savings and help you achieve homeownership.

Contact our team today to learn how we can and mortgages can change your life.

Resource Guides

Complete A to Z guides on your home purchase journey.

Learn about the process for getting a home loan

What steps you can take to improve your credit score

Tips and tricks for moving into your new home

Your step-by-step guide for buying a new home

Scroll to Top