No Income Verification Mortgage Loans – Is It Possible?
No income verification mortgage loans or no income loans are for people who want to purchase a home without any documents that can prove a steady income. It is for self-employed people with a tricky employment income that does not meet the standard income requirements of traditional loan programs.
No income verification loans do not require a ton of paperwork, meaning you can get approved or denied faster than a fully-documented loan with complex tax returns. If you are looking to apply for a loan with no income or do not have enough paperwork to support your income but can pay for monthly mortgages—maybe you are qualified for a no income verification mortgage loan.
What are No Income Verification Mortgage Loans?
No income verification loans are loans where lenders do not require applicants to prove or provide verification of a source of income. No income loans are also referred to as “stated-income loans,” “alt-doc loans,” or “no-doc loans.”
There are 6 types of no income mortgage loans, and depending on your source of income and the documents you can provide—one of these options might work for you.
6 Types of No Income Loans
Here are some of the variations of no-document loans you might need depending on your income and what you are planning to purchase:
SISA (Stated Income, Stated Assets)
SISA loans are useful if you have significant income and assets that cannot be difficult to document. If a lender agrees to accept the income and asset figures you provided without documentation, it is called a SISA loan. Small business owners or sole proprietors who keep their assets in a business account but do not document their personal income and compensation in the form of pay stubs, W-2 or 1099 forms, or cannot calculate the cash flow can resort to an SISA loan, as long as there is a viable business and assets to show.
SIVA (Stated Income, Verified Assets)
If a large part of your income is hard to document, but you have verified and documented assets to show, an SIVA loan is probably the best option for you. The lender will accept your undocumented income and verify your available assets. It is the appropriate loan for someone whose income is based on tips and gratuities put into their personal bank account.
NIVA (No Income, Verified Assets)
An NIVA loan is for applicants who have verified assets but unverifiable income. If this is the case, the lender will only verify your assets and not include your income in the filing process. It is a possible option for retirees who get income from their retirement accounts, which may be hard to document but have assets that can be documented—making them qualify for this type of loan.
NINA (No Income, No Assets)
NINA loans require the fewest requirements since there is no way of documenting any of your income and assets. You’re probably wondering how lenders approve these types of loans. To answer your question, NINA loan lenders approve these loans solely based on collateral and other non-income factors. People working for a foreign company may not be able to provide the documents needed for this loan, and they also probably have their assets tied to a foreign bank, meaning they have the income and the assets. They are just unable to document them in forms acceptable by lenders in the United States.
If that is the case, NINA lenders will skip the document and approve the loan if you meet other terms like providing collateral or other documents proving you can pay.
Stated income loans are loans that are approved without providing W2s, tax information, bank statements or any source that can verify the applicant’s income. Stated income loans also do not verify assets. One will get approved if they can provide collateral and meet terms similar to an NINA or SISA loan.
NINJA loans mean no-income, no-job, no-asset mortgages. They don’t require lenders to verify income, assets, and employment. Essentially, the only thing a lender will need is your good word before lending you money. However, not many lenders provide this type of loan, except for possibly family members and close friends who rely on your word and character.
Are No Income Loans Right for You?
If you are self-employed, have seasonal employment, are working for a foreign company, or are a retiree—no income loans might be your best route when buying a house or starting a business.
Because of your case, you might not have a way to document your assets and income, which makes it difficult for you to get approved for a regular loan. No income loans may be your best bet if that is the case.
Pros and Cons of No Income Verification Loans
- You don’t have to worry about documentation.
- You may qualify using just your assets or have assets as collateral.
- Higher chances of getting approved for people with lower income.
- Expect higher interest rates.
- You will need a higher credit.
- You will need to pay more upfront with a higher down payment.
No Income Loans vs. Conventional Loans
The down payment on no income loans is usually 20% compared to the 3% on conventional loans.
No income loans require no documents, while conventional loans will require a ton of paperwork.
Expect to pay high-interest rates on no-income loans compared to conventional loans.
Are No Income Loans Safe?
Getting no-document loans is safer now than before because now, mortgage lenders must follow federal laws to verify your capacity to pay. However, just like any other type of loan, you risk losing your home if you cannot afford the monthly mortgages.