Buying a home is an exciting milestone in life However, the process of getting a mortgage can be daunting, especially if you have an unconventional income situation As a self-employed individual or someone with variable income, providing traditional income documentation like tax returns and paystubs is tricky. Thankfully, you still have options to finance your home. Let’s explore how you can get a home loan without submitting your tax returns.
What Are No-Income Verification Loans?
No-income verification loans, also called no-doc or bank statement loans, are mortgages that don’t require tax returns or pay stubs to prove your income. Instead, the lender verifies your ability to repay through other documentation like bank statements.
These loans used to be quite risky before the 2008 housing crisis, but lenders have since tightened their requirements. Legitimate no-doc loans today provide a viable option for borrowers with unique income situations.
Who Should Consider No-Income Verification Loans?
No-doc loans work well for certain borrowers such as
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Self-employed individuals whose tax returns don’t reflect their true earnings Since the self-employed can deduct many business expenses, their taxable income is lower than their actual take-home pay
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People with variable sources of income like commissions, investments, side jobs, etc. Their income fluctuates and may be difficult to document with W-2s.
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Borrowers who have experienced recent changes in income that traditional documentation can’t verify. For example, if you just switched to a higher paying job.
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Real estate investors and business owners who want to leverage their assets into more properties. Some lenders will approve loans based on your assets rather than just your income.
No-doc loans provide more flexible options if you fall into one of these categories.
How Do No-Income Verification Loans Work?
While named “no-doc,” these loans do require you to provide some documentation. Here are some common ways lenders evaluate your ability to repay:
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Bank statements – 12 to 24 months of personal or business bank statement deposits and balances. Lenders verify consistent cash flow.
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Assets – Large amounts of money or investments that can be easily liquidated. Lenders ensure your assets could cover the loan if needed.
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Investment property income – For real estate investors, providing leases to confirm rental income.
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Credible credit history – Since income isn’t verified, excellent credit is very important. Minimum scores around 700.
Reputable lenders complete due diligence to confirm you can repay the mortgage. They want to avoid foreclosures just as much as you do.
Pros and Cons of No-Income Verification Loans
No-doc loans have unique advantages:
Pros
- Quick approval without lengthy income documentation
- Accommodate variable or difficult to prove income
- Leverage your assets rather than income to qualify
- Alternative if you don’t meet requirements for standard loans
Cons
- Higher interest rates and larger down payments than conventional loans
- Need pristine credit scores over 700
- Smaller loan amounts and stricter limits
- Difficult to refinance into other products later
While not ideal for every buyer, no-doc loans fill an important niche.
Comparing Loan Types
No-income verification loans differ from standard mortgage options:
| Loan Type | Income Verification | Down Payment | Credit Score | Interest Rates |
|---|---|---|---|---|
| No-Doc | Bank statements | 20-30% | 700+ | Higher |
| FHA | Tax returns | 3.5% | 580+ | Lower |
| Conventional | Paystubs & W-2s | 3-20% | 620+ | Lower |
No-doc loans require more upfront cash and excellent credit to offset the higher risk from minimal income verification. Government-backed FHA and conventional loans are more flexible overall.
Tips for Getting Approved
Follow these tips to boost your chances of no-doc loan approval:
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Have pristine credit – Lenders look for scores over 700 since your income isn’t confirmed. Pay down balances and correct errors on your credit reports.
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Make a large down payment – At least 20% to 30% down shows your commitment to repaying. Money in the deal reassures lenders.
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Keep consistent bank balances – Regular deposits and minimal overdrafts indicate you manage money well. Explain any large fluctuations.
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Work with a specialized lender – Not all lenders offer no-income verification loans. Find one experienced with these products.
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Ask lenders what else helps – Every lender has unique requirements. Learn what makes an application stand out.
With smart preparation, you can show lenders you deserve a no-doc loan.
Step-by-Step Process to Get Approved
Here is an overview of the no-tax return mortgage process:
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Check your credit – Get reports from Equifax, Experian and Transunion. Start improving your score several months in advance.
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Gather bank statements – Have 12 to 24 months of personal and business statements ready. Explain any inconsistencies.
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Compare lender quotes – Reach out to lenders specializing in no-doc loans. Compare interest rates, fees, and eligibility.
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Get pre-approved – Choose a lender to get pre-approved. This shows sellers you are qualified.
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Make an offer – Once your offer is accepted, complete the full application with your chosen lender.
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Submit documentation – Provide updated bank statements, credit info, assets, and anything else the lender requests.
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Close on time – Finalize all paperwork and payments to close on-time.
The process is straightforward when you prepare upfront.
7 Top Lenders for Loans Without Tax Returns
Many excellent lenders offer no-tax return mortgages. Here are some top picks:
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New American Funding – Variety of alternative income verification loans. Purchase and refinance options.
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Angel Oak – Specializes in bank statement loans. Flexible qualifying. As low as 10% down.
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Caliber Home Loans – Cash-out refinance without tax returns. Enables you to tap home equity.
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Greenbox Loans – Bank statement loans as low as 10% down. Options for lower credit scores.
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Union Home Mortgage – Bank statement loans up to $1 million. First-time buyer programs.
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Guild Mortgage – Several loan products for self-employed borrowers. Jumbo loans available.
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CrossCountry Mortgage – Up to $6 million with 12 or 24 month bank statements. 1% down payment option.
Shop multiple lenders to find the best fit for your scenario.
Current Interest Rates and Payments
Interest rates fluctuate daily based on market conditions. No-doc loans typically have higher rates than conventional mortgages. Here are sample rates as of today:
| Loan Type | Interest Rate | APR | Monthly Payment |
|---|---|---|---|
| 30-Year Fixed | 6.500% | 6.690% | $1,043 |
| 15-Year Fixed | 5.875% | 6.123% | $1,349 |
| 5/1 ARM | 5.125% | 5.386% | $843 |
*Based on a $300,000 loan with 20% down payment. Rates for illustration only. Verify current rates with lenders.
Compare options to see if the higher cost of a no-doc loan still fits your budget.
The Bottom Line
Getting a home loan without tax returns is possible through lenders offering no-doc mortgages. While requirements are stricter than standard loans, these products open homeownership to more buyers. Just be sure to have a large down payment, stellar credit, and consistent assets or income streams that can be verified with documents other than tax returns. If you fall into this category, no-income verification loans can make your dream of homeownership a reality!
Requirements for Mortgage Without Tax Returns
Borrowers are typically self-employed – The no tax return lender will need to verify this either with a business listing or a business license, a letter from your accountant, your website, etc. They may require one or more of these to prove that you are in business. 1099 borrowers may also qualify.
Down Payment – Some no tax return mortgage lenders may ask for a 10% down payment, but it all depends upon your unique scenario. In most instances, the down payment may be higher. Other factors will impact your down payment such as credit score, assets, and more.
Credit Scores – There are no specific credit score requirements, but your credit score will play a major role in what your down payment and interest rate will be. Let us help you to figure all of this out without having to run your credit.
No Tax Return Requirements – Most of our lenders will ask for your last 12-24 months’ bank statements. The bank statements will be used as income verification. They will use the average monthly deposits and will treat them as income. They typically use 100% of the deposits from your personal bank accounts and a portion of your business accounts.
Other Assets – It is important to list as many assets as possible to help with the approval of your mortgage application. Underwriters always look at compensating factors and assets is one of them.
Property Types – Single family up to 4 units, second homes and investment properties.
No-Tax Return Mortgage Pros and Cons
Pros
- No tax returns needed to prove income.
- The down payment requirement is reasonable.
- The interest rates are competitive.
- Debt to income ratios of up to 50% allowed.
- No prepayment penalties
Cons
- You need to have a legitimate business and can prove it.
- The rates are slightly higher than what you would get with a conventional mortgage
- The down payment requirement could increase if other factors such as low credit scores.
- Not all lenders off this program
Contact us by completing our form to the right or at the bottom and we will call to answer all of your questions.
How to get a Mortgage without Tax Returns
FAQ
Can you get approved for a home loan without tax returns?
Can you get a mortgage if you don’t file taxes?
Do you need to show tax returns to get a loan?
What mortgage does not require proof of income?
Can I get a mortgage without a tax return?
The exact rate you’ll receive usually depends on the loan type, down payment and credit rating. A mortgage without tax returns isn’t right for everyone, depending on your financial situation. You may end up with a higher interest rate, which will increase your monthly payments. Some non-QM loans start with interest-only payments.
Why can’t I get a home loan if my income is low?
You want to purchase a home but can’t get approved for a traditional mortgage due to issues with your tax returns. This isn’t uncommon for individuals with lower gross incomes due to tax write-offs. Unfortunately, many lenders use this income figure when deciding how much of a home loan you qualify for, if any, or if your gross income is too low.
Which mortgage lender does not require tax returns?
Read our Advertiser Disclosure. Jump straight to it: The best mortgage lender that doesn’t require tax returns is CrossCountry Mortgage. Navigating the mortgage process can be a challenge if you’re self-employed, work part-time or have erratic income for other reasons. Lenders recognize that not everyone has a traditional 9-5 job.
How do I get a home loan without a tax return?
You could also be required to submit 1099s from the most recent tax year to prove your status as a self-employed applicant. To secure a home loan without a tax return, you’ll also need to make a down payment, usually between 10 and 20 percent.