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!
Excellent service!. Recently purchased a property in Northern San Diego County. Chad and his team were recommended to me to check out. The rate he acquired was a full point & a half better than the Broker I have been using for years. His team was exceptional and did great follow through. Definitely 5 star service!”
“Chad and his team are exactly who you want handling the financing of your home. Whether it be a new purchase or refinance, he and his team are one of the most professional, responsive group of people I’ve worked with. Buying a home can be very stressful and Chad and his team took all of the necessary steps to make the process as painless and as quick as possible. They are extremely knowledgeable, organized and have great follow through. You won’t ever be left wondering what the next steps are. I highly recommend him and will use him in all of our real estate transactions moving forward.”
“Chad – Your team has been nothing short of amazing. Juliann has aggressively followed-up with escrow and gone out of her way to make sure things get done on schedule. Matt and I can’t express to you enough how much we’ve appreciated all of your counsel at the beginning of the process and her execution to see it through to close. As always, appreciate everything that you guys have done to see this through.”