Non-bank lenders, such as Mortgage House, have changed the mortgage lending industry. It’s possible to obtain a home loan without providing full documentation. If you have no current tax returns, it’s OK. Instead, you’ll submit alternative financial documentation. Without full documentation, you can apply for the low doc loan.
The low doc loan provides a set of limits and features. For example, it carries a higher interest rate. Instead of receiving 3%, you’ll receive 5%. In addition, it only covers a percentage of the home’s appraised value.
In most cases, low doc loan applicants receive 60% of the property’s appraised value. If you plan to purchase a home that receives a $550,000 valuation, the lender can approve loan terms for $330,000.
If you accept loan terms with a competitive interest rate and the provided financial documentation is accepted, some lenders lend 80% of the property’s appraised value. Since the amount lent is higher, additional fees may apply.
Another option is 90% funding that includes higher interest rates.
Lenders ask low doc loan applicants to provide a signed self-income verification form, recent business activity statements, and bank statements instead of current tax returns. A letter from your accountant who outlines your current financial position helps too.
No Current Tax Returns and Mortgage Borrowing Conclusion
If you have no current tax returns because you’re self-employed or a small business owner, you can still become a homeowner. Mortgage House also provides refinance home loan options. For more information, contact our loan specialists.
