More and more lenders are offering no-doc mortgage options to help borrowers with tricky income situations with loans to buy or refinance homes. Also called no-income verification mortgage or stated income loan, a no-doc mortgage may help you close your home loan faster, especially if you have complicated tax returns.
Today’s no-income-verification mortgages come with extra consumer protections, making them a viable alternative to traditional home loans.
Purchasing a home is an exciting milestone in life. However, the process of getting approved for a mortgage can be stressful, especially if you have an unconventional income source. If you are self-employed, retired, or have other unique financial circumstances, you may struggle to provide the standard proof of income that most lenders require. The good news is that it is still possible to get a home loan with no proof of income in 2023. Here’s what you need to know.
What is a No Income Verification Mortgage?
A no income verification mortgage, also known as a no doc loan or non-QM (non-qualified mortgage), does not require you to provide pay stubs, tax returns, or other standard income documentation. Instead, the lender will evaluate your ability to repay the loan based on your assets, credit, and other factors.
These mortgages emerged in the early 2000s as an option for self-employed borrowers or those with hard-to-document income sources. However, lax lending standards led to abuse, which contributed to the 2008 housing crisis. As a result, no income verification mortgages were mostly discontinued.
In recent years, a new version of no doc loans has re-emerged to serve creditworthy borrowers with legitimate needs for flexible underwriting. While not “no doc” in the traditional sense, these loans offer more flexible documentation options
Types of No Income Verification Loans
There are a few different types of mortgages that don’t require traditional income documentation:
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Stated Income Verified Assets (SIVA) – You report your income without having to provide documentation. The lender verifies assets to determine affordability.
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No Income Verified Assets (NIVA) – Designed for retirees or others with substantial assets but little or no income. The lender only reviews your assets.
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No Income No Assets (NINA) – Rare option where no income or assets are verified. Only available for investment properties, based on rental income potential.
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Bank Statement Loans – The lender reviews several months of bank statements to confirm you have enough deposits to support the requested loan amount.
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Alternative Documentation Loans – The lender may request a combination of bank statements, CPA letters, investment account balances, or business tax returns to underwrite the loan.
Qualifying for a No Income Verification Mortgage
To qualify for a no income verification mortgage, you’ll generally need:
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Excellent credit – minimum 720 credit score
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Significant assets – most lenders want to see at least 12 months of reserves
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Low debt-to-income ratio – even without income verification, DTI typically capped around 40%
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Large down payment – often 20% or more
Lenders also look closely at factors like employment history, savings patterns, and seasoning of assets. The review is rigorous to ensure you are still a low-risk borrower despite less documentation.
Where to Get a No Doc Home Loan
Very few mainstream lenders offer these loans, so you’ll need to shop with alternative or non-QM lenders such as:
- LoanDepot
- Angel Oak
- Citadel Servicing
- Newfi Lending
- Athas Capital
- Axos Bank
Mortgage brokers familiar with non-QM lending can also help you find the right lender and program. Expect to pay a slightly higher interest rate than conventional loans, often 0.5 to 1.5% higher.
Pros and Cons of No Income Verification Loans
Pros
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Easier to qualify if you have limited or difficult to document income
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Faster closing since less documentation to collect
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Flexible for self-employed or frequently changing income
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Liquid assets can make up for lower income
Cons
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Higher interest rates and fees
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Need excellent credit and significant assets
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Fewer lenders to choose from
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Difficult to refinance into conventional loan
Should You Consider a No Doc Mortgage?
If you have trouble qualifying for a standard mortgage, a no income verification loan may be your solution. However, make sure you explore all options first. Look at FHA, VA, and USDA loans which offer more flexibility than conventional mortgages. Or, work to improve your credit score or save up a larger down payment.
No doc loans fill a specific need but aren’t right for everyone. Consider both the benefits and drawbacks carefully. And work with an experienced loan officer to ensure the loan product aligns with your financial profile and home buying goals.
The Bottom Line
While true no documentation mortgages are a thing of the past, you can still get approved for a home loan without standard income verification. Just be prepared to have your assets thoroughly reviewed by the lender. And shop with alternative lenders familiar with the unique guidelines for these niche mortgage products. With the right approach, buying a home without providing pay stubs or tax returns is achievable with a no income verification loan.
How do I get a no-doc mortgage?
The term “no-doc mortgage” doesn’t mean lenders make loans to just anyone. In fact, no-documentation mortgage lenders must make a good-faith effort to show you can repay the loans they offer. That means they’ll ask for other proof you can afford the payments.
Below are four common requirements for no-income-verification mortgages.
- Have good credit. No-income-verification mortgage programs generally require a higher credit score than a regular loan with income documents.
- Make a large down payment. The down payment minimum on no-doc mortgage loans usually starts at 20%.
- Expect higher interest rates. Lenders may charge higher rates than you’d pay for a regular mortgage to cover the higher risk of forgoing documentation.
- Prove you can repay the loan. Whether it’s bank statement deposits, rent on an investment property you’re buying or a large stockpile of assets, lenders need proof you have the resources to make monthly payments on your loan.
What is a no-income-verification mortgage?
A no-income-verification mortgage is a home loan that doesn’t require the documentation that standard loans typically require like pay stubs, W2s or tax returns. However, don’t let the name fool you: Some paperwork is required to get a no-doc loan. The lender accepts other items, such as bank statements, as proof you can repay the mortgage.
Modern-day no-doc mortgages are different from the stated-income loans that were popular before the housing crash of 2007 and 2008. Designed primarily for self-employed borrowers, stated income loans used to allow applicants to essentially “state” whatever income was needed to qualify. Now lenders have to prove that borrowers taking out no-doc mortgages have the resources to pay the loans back.
How to get a No Income Verification Mortgage Loan
FAQ
Is it possible to get a mortgage with no proof of income?
What if I have no proof of income?
Are there still no income verification loans?
What is the minimum proof of income for a mortgage?
Can you get a mortgage without proof of income?
Although you can’t get approved for a traditional mortgage without proof of income, there are other loan options when trying to obtain a primary residence. You can get approved for a mortgage loan without proof of income by providing proof of assets. If you have enough assets, the lender might be willing to move forward regardless of income.
Can you get a mortgage if you can’t prove income?
If you can’t prove you’ll repay your mortgage, you might not get approved for a home loan. With a no-income verification mortgage, the mortgage broker won’t consider your income in your application for approval. Because no-doc mortgage lenders don’t check your income, those companies don’t have much to go off of to make sure you’ll repay your loan.
Do no-income verification mortgages require proof of income?
No-income verification mortgages don’t require proof of income. But these types of loans require proof of other assets. You always need to prove to a lender that you can afford to repay the loan. What is a no-income verification mortgage?
Do no documentation mortgages require income verification?
No documentation mortgages do not require income verification from the borrower, only a declaration that the borrower can repay the loan. No doc mortgages are commonly granted to individuals who don’t have a regular source of income including those who are self-employed. Since the Great Recession, true no doc mortgages are essentially illegal.