Why Would you Use a No Doc Home Loan?

Is your mortgage broker or account executive recommending that you use a no doc home loan to refinance your mortgage? Why would they recommend this type of program? There are a few reasons why no doc home loans might be used and there are a few reasons why you might want to use them. Here are some situations that they are good for and one that they are not good for.

First, if you work for yourself and own your own company, then the no doc type of home loan was designed for you. This is a mortgage that allows you to state what your income is and not have to prove it. Since many self employed individuals do not claim everything they make, they end up having trouble proving their real income. This happens a lot when you have a lot of people that pay you in cash.

This is the perfect situation to use a no doc home loan in.

Second, if you earn tips and you do not claim all of them, then it is probably a very good idea to use some sort of no doc program for your mortgage refinance. Sure the rate will not be quite as good and you will have to have pretty good credit, but this is probably going to be the only way you can get your refinance done since you struggle to prove your entire income.

Last, if you work for a company that pays you a regular paycheck either bi weekly, weekly, monthly, bi monthly, or any other way, then you NEVER need to use a no doc home loan. Some mortage brokers or account executives might try to talk you into this type of loan because it is the only way they can get you done, but this means you cannot afford the mortgage and that is just setting you up for failure.