This type of mortgage loan is also known as a stated income loan. The meaning of the No income verification loan is that it allows the borrower to state their income on the application while providing no documentation to substantiate it. Most no income verification programs require a strong credit history along with substantial, verifiable liquid assets. Loan-to-value limits may vary depending on credit ratings, liquidity, property type and usage. The limitations on the no income verification loans may also vary depending on the borrower’s type of employment. Candidates for no-income verification loans include the following:
• Commissioned borrowers
• Self employed borrowers
• Non-salaried borrowers
• Borrowers with financial profiles that are complicated and wish to minimize documentation requirements
An example of the no income verification mortgage would be someone who started up a company in the last year and has no proof of income from tax statements or from pay stubs to show the lender. The borrower has an impressive bank account and credit from being self employed that the lender decides to grant the borrower a loan.
Is a 4506 form required with a no income verification loan? Not in most cases.