Most people who need a mortgage loan can verify their income easily. They simply use their regular paystub, which usually comes every other week, proving to the lender that they make a certain amount.
But not everyone can verify their income that easily. What if you are a real estate investor who has passive losses that erase your earnings (although only on paper) even though you have the cash flow needed to pay for a mortgage bill? What if you work on commission, earning an income that is directly related to your monthly performance? In this case, you may have months where you earn a tremendous amount while other months show almost no income.
In these unique situations, there can be a major difference between your income stated on tax returns and the actual amount you earn. If this is the case for you, you might benefit from a mortgage loan that does not require verification of your income or debt-to-income ratio.
No-Ratio and No-Income-Qualification Loans for Your Investment Properties
Why are No-Documentation Loans Almost Impossible to Find?
No-documentation loans, often called “no-doc” in the real estate industry, had become very popular in the early 2000’s. In the early years of the new millennium, no-doc loans helped many borrowers who, while having a solid income, could not verify their earnings. Unfortunately, the program, which was intended to help people, many people who should not have taken out large loans were able to get hundreds of thousands of dollars with little more than a signature. Some subprime (low credit score) lenders took advantage of borrowers who could not repay the loans. Eventually, these loans were so abused that they became known as “liar loans,” and people offering these loans became labeled as “predatory lenders.” This unscrupulous lending is one of the main causes that is blamed for the financial crisis that started in 2008. But things have improved significantly since then.
When the financial crisis occurred, the federal government quickly realized that it needed to make significant changes to how lending is performed. Numerous consumer protections were implemented, including a rule in the Dodd-Frank Wall Street Reform and Consumer Protection Act that stated borrowers had to prove that they could repay a loan, and lender had to perform due diligence to verify this information.
No-Ratio and No-Income Loans for Your Investment Property
Most borrowers will find that loans with no documentation whatsoever are extremely rare. Despite this reality, it is possible to get a loan with no verification of your debt-to-income ratio. This can be extremely helpful if you earn an income that is irregular or based on a career that provides inconsistent payments.
Sales associates who work on commission are the perfect example. In this career, you won’t earn the same amount from month to month. You might have a month when you receive payments of $15,000, and the very next month you’ll only bring in $2,000. Does this mean you won’t be able to secure a mortgage? Not at all!
Employees who receive a lump-sum salary may also benefit from these types of investment-property loans, as will the self-employed and people who receive an income from retirement savings. Essentially, if your income is based off a non-typical type of payment, there is an advantage to using these loans.
Get Excellent Terms from San Diego Purchase Loans
When you work with San Diego Purchase Loans, you can get a maximum loan amount of up to $2 million for an investment-property purchase. This allows you to take full advantage of a growing market, and lets you become part of an investment strategy that has a history of creating reliable long-term wealth and financial stability.
With these loans, you can either make a new purchase or use it to refinance your current investment-property mortgage. Refinancing can be done for many different reasons, including to get a better rate or to have superior terms on your mortgage. You can also use the program to do a cash-out refinance on your investment property, which will allow you to take advantage of any equity you have built through the years.
These loans are available for a wide variety of properties. You can get a loan for properties with two, three, or four units, and you can also purchase condos with these loans. Another option for these loans is the purchase of a planned unit development (PUD). This gives you the options needed to make a great purchase on many different properties. Non-warrantable condos are also okay with this loan type, providing even more options for your investment portfolio.
There are a few requirements that you’ll need to meet in order to qualify for this loan. First of all, you need to have a strong credit score. In fact, you’ll need a score of at least 620. Yes, this is a high score that many borrowers won’t be able to meet (at least not right away), but these types of loans create a higher level of risk, so lenders need to ensure they do what they can to reduce risk; requiring a high credit score is just one of the ways they achieve this goal.
Tips for Securing a Top-Quality No-Ratio and No-Income-Qualification Loan
You can secure one of these loans, but you need to make sure your finances and borrowing profile is in good standing. First of all, you’ll likely want to save for a down payment, as you may need as much as 20% down (or more) for these loans. You’ll also want to make efforts to ensure your credit is strong. If you make the right steps, you could secure the excellent loan you need for your investment property, all without a ratio or income verification!
Providing the Support You Need for Investment-Property Loans
Contact the helpful team at San Diego Purchase Loans to learn more about the no-ratio and no-income-verification loans that are available now!
“This is the second time that I have worked with Chad (home purchase & refinance). He has become my subject matter expert and someone I depend on for all finance needs related to our home and real estate investments. My favorite things about Chad are his depth of knowledge, responsiveness, honesty and the great service he provides. I have referred countless friends and family of mine to work with him for no other reason than I know that he will treat them well and equip them for the best possible outcome. Chad will add tremendous value to any real estate transaction that you have and I am grateful to have him as a resource.”
“Chad, it was a pleasure working with you. Your loan was smooth, speedy, and we were kept well informed. I will make sure to prioritize offers where you are the loan officer as I know they run smoothly.”
Chad and his team were very attentive to all of my needs, they called , emailed and checked in often. No question was left unanswered! Maria was a superstar! taking all my calls no matter the time or day and walking me through every process. The follow through was amazing and I am just so happy that my realtor referred them to me. I was originally referred to another lender that pretty much had no time for me nor did they even bother to try and find me the right loan since I am a widow with one income and a first time buyer with so so credit. I am completely happy with my loan and everything they did for me! Thank you Chad, Maria and Karina for all you did!