Home Equity loans with no Verifiable income.
A no income verification home equity loan is essentially a second mortgage loan that does not require a loan applicant to provide income documentation in order to qualify for the loan. This type of loan works well for homeowners who need a home equity loan but have hard to document income.
The majority of loan applicants with hard to document income are self-employed or commission based professionals. Consumers who fall with in these categories may have high to medium income and have a lot of business related deductions that they use to write off on taxes.
This has a double edge sword effect as it reduces the taxable income and the amount of taxes owed, The other side of the sword is, when it comes down to getting a home loan it can hurt as most lenders use an average of your last 2 years of taxable net income “the amount left after all of your deductions” to determine your income for qualifying purposes. This scenario causes you to have a debt to income ratio problem, you have a high debt load and this keeps you from qualifying for a conventional loan. With a no income verification home equity loan, however, your gross income is used for qualifying purposes as opposed to the net income.
In order for you to qualify for a no income verification home equity loan you will need good credit and a high credit score. Choosing a no income verification loan will also mean you will pay a higher rate for this type of loan as opposed to a traditional loan in which you have to document your income. Even though a no income verification loan does not require you to document your income, some larger lenders may require that you have a certain dollar value of assets on hand which must be verified. Not all lenders have this requirement though - some lenders offer a program called NINA which stands for “no income no assets” meaning you do not have to document either. Loan guidelines and rates vary from lender to lender so it is a good idea to shop around to increase your chances of getting the best deal available to you.
Written by admin on September 25th, 2006 with no comments.
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A NINA Loan is a where the borrower (You) does not disclose income or assets on the application.
These loans are a higher risk to the lender. Since they are higher risk loans they demand a higher fico score and the rates are higher then traditional loans.
NINA loans are often used for homebuyers whose incomes are difficult to document, more often commission based or self employed people, whose incomes consist mostly of cash. A lot of small business owners also prefer NINA mortgages because their incomes are closely tied to their business and or commissions. When business owners apply for Full-Doc loans, banks require their business financial documents, such as 1120, 1120S, 1065, various docs, year-to-date Profit and Loss statements, business account statements, etc., in addition to their personal financial documents…stocks, bonds, real-estate investments. In stead of going through disclosing all of their business financial information, most business owners opt for the simplicity of NINA mortgage loan package.
NINA mortgages, No-Income No-Asset, don’t require loan applicants to disclose the amount of their salaries or their cash reserves. Banks still want to know about the homebuyers’ employment information. NINANE, which stands for No-Income No-Asset No-Employment, or other wise known as No-Doc mortgages, do not require even the disclosure of the homebuyers’ employment.
NINA loans require a high credit score. Generally the higher the loan to value will mean the higher the score needed to qualify.
A NINA loan is typically chosen by self employed borrowers that do not have seasoned funds and cannot prove their income on the books. Seasoned funds must have a traceable history of 60 days and cannot include cash or unsecured borrowed funds.
A Loan To Value ratio in which borrowers are allowed to borrow are usually much lower on a No Income, No Assets loan programs.
The line gets a bit grey between the no-ratio and NINA mortgages, and always is swayed by the credit score. In most cases, a lender will want to know what the NINA applicant does for his or hers profession, and for how long. Lenders feel most comfortable when a borrower has been in business for least two to five years.
The NINA loan approval is based on down payment, credit history, and property value. This program still requires “employment” documentation of your past 2 years, while others do not.
Nina mortgages also take less time to process do to the less paperwork being underwritten.
NINA stands for “No Income, No Assets”.
These types of loan programs allow a credit worthy borrower to access financing through no traditional documentation. There are a variety of programs available. Some programs even allow a borrower to finance 100% of the property value for a refinance or a purchase.
Written by admin on September 12th, 2006 with no comments.
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