Obtaining a mortgage for commercial purposes is a big decision to make, be it small/large businesses, multi-national corporations, reputed financial institutions, well-known investors, property owners or real estate developers.
In most cases, borrowers opt for conventional loans for meeting their financial needs. It is not easy to provide proof of income or employment for someone who is self-employed or retired or any individual who doesn’t have a fixed source of income. Some of the documents required for an approval of traditional commercial finances are a paycheck, 2 years taxes, including business and personal, salaries, and financial statements.
Types of no-income mortgage finance
Three basic types of no-income loans are: 1) No document loans 2) No ratio loans and 3) Stated income finance.
1. No income/no asset verification/ no documentation mortgages
For the approval of no income/no asset verification/ no documentation mortgages, borrowers require least documentations. The demands of the lenders of the borrowers are restricted to the name, social security number, loan amount, and down payments. Such type of financing depends on good credit score.
2. No ratio mortgages
The borrowers don’t require declaring their income when they avail no ratio financing solutions. In addition to this, there is no requirement of W2 form, paychecks and tax returns. The no-ratio finance doesn’t calculate debt to income ratio of the borrower. But this “no income verification loan” requires the borrower lists their assets such as stocks & bonds, bank balance, business, property, and ownership.
3. Stated income finance
It (stated income finance) is ideal for those who work and effectively draw wages, but not regular wages like that from an employer. This no income verification loan works for self-employed people. In addition to this, such type of financing is ideal for people who live on commissions and tips.
Why choose no-income verification finances?
Although you have high income and assets, it will be hard for you get a traditional loan approved by the banks or other lending agencies, if you don’t have proof of employment and income or you simpy exercise your write to deduct various business expenses decreasing your taxable income which will not qualify for financing via traditional means with a retail ban oryour local community banks. Many lenders require at least two to three years of employment proof, for the approval of their finance. A no income verification mortgages can effectively counter this situation when the borrower cannot adhere to conventional loan demand.
When investors should not apply for no-income finance
Low or no documentation finance refers to a mortgage that does not require borrowers to provide documentations of their personal income. Such type of financial products is commonly used by Park West Capital for the investors who don’t qualify for traditional loans due to lack of proper documentations or taxable income.
Investors should not apply for low/any doc financial solutions if they don’t want to pay a moderately higher rate of interest. In addition to this, investors should not apply for no-doc mortgage if they don’t want to provide a moderately larger down payment, which is typically about 25%-30% of the purchase price of the property or pending equity of the property being refinanced.
Are you interested in obtaining a no-income verification loan for meeting your financial needs? If your answer is affirmative, then get in touch with Park West Capital. It offers no doc/income verification loans, which are considered the best way for the borrowers to borrow money without any financial statements or recent tax returns.
This update is provided to you by Park West Capital. With over a decade experience specializing in real estate financing and commercial lending opportunities. We have assisted numerous clients with growing their real estate portfolios and providing the funding resources. We firmly believe in accountability, excellence, integrity, entrepreneurship, and teamwork. Contact us at 800-969-4901 to learn more about how we can professionally assist you with your investing needs or fill out our hard money loan application and we’ll get in touch with you.