Being self employed, I have a question about “No Doc” loans. Is there a limit to the amount they can loan me?
For example:
I want to buy a $1.1million single family residence and put about 30% down. My credit score is around 730. Will banks give me a $770,000 no doc mortgage?
The answer is probably- guidelines are lender-specific, but with your credit score, you should be OK. Is this an investment property or your primary residence?
whoisray,
You may not need a “no doc” just because your self employed.
There are several different processing styles ranging from full doc to no doc.
Full doc is based off 2 yrs history of employment and would require 2yrs verification and income along with assets for reserve and down payemnt requirements.
Then there is state income/verified assest for those who write off a lot of income or dont want to hassle with sending in tax returns. 2 years history of employment still required along with enough assets.
Next would be no ratio. Great for those who may have the 2 year history of employment but even stating the amount they make would not be enough to qualify for debt to income. No income is listed on the application therefore no ratios calculated. Still need required assets.
Stated Income/Stated Assets works for those with 2 years history of employment but dont want to show income and the assest have not been seasoned long enough to use for qualying. The assets can then be stated on the application without being verified.
No income / verified assets. This can get someone in who does not have a 2 year history of employment but has the required assets to be verified.
Last but not least is the no doc loan. Terrific for anyone who does not have a 2 year history of employment nor can they verify assets. They have very little information to send in.
Of coarse the underwriting guidelines for loan limits will vary off credit scores and loan amounts. Some lenders will allow for 95% on noc for investment properties. You have to be very careful as no docs have special property restrictions.
There are even a couple lenders who offer rates with very little adjustment for processing styles.
Sounds like you may be in good shape though.
Whoisray,
Going back to the original question,
There isn’t a limit on what a lender will loan you provided that this scenario is owner occupied. If this reflects a non owner occupied investment purchase, then you may have some lender restrictions as RJ has stated.
If you must go “no doc” you’ll more than likely take a higher rate. However, going “no doc” means they will weigh heavily their underwriting decision on the appraisal, since you are providing no documentation. With that credit score you should try showing some assets for a better rate and leave the “no doc” on the back burner in case you absolutley cannot show anything.
With 30% down and a 730 FICO you can have pretty much whatever you want since this would be for a personal residence.
THANK YOU EVERYONE!!
I also have another question. What type of a loan would allow me to pay the least amount of monthly payments per month for the first 5 years? For example I am planning to pay off the house in 2-3 years so I would prefer a mortgage that at the beginning have very low monthly payments, then once I have the money, I will pay it off one lump sum. Would a 5 year ARM work best here?
Sorry for all these newbie questions. Just a bit nervous before I sign the contract.
Option ARM will have the lowest payment…But, you will be defering interest payments, i.e., neg. am.
I agree with Patrick. Which is really scary. 
An option ARM or I/O program is the best route!
I can give you a no doc loan up to $2 million with that credit score…
I could do this deal while sleepwalking!
lol 
LOL…Right. ;D
“Ohhhh… you have a 740 FICO and 30% for down payment. I don’t know, the clients I usually work with have a 540 FICO and no funds…this could be a tough one.” lol