Why not just No Doc Mortgage loans?

I see that a lot of you use Hard money lenders, but I was talking to my mortgage broker and he said he could get us No documentation mortgage loans (up to 10 at once). They don’t require any income or asset verification, only goes by credit score and LTV. Do any of you use this technique? Thanks, Amy

yea no doc deals are a great way to get money but try to get a loan from your guy for a rehab. if he dosent laugh you out of the front door somethings wrong. if you want to but a multifamily to rent out then go to your mortgage guy, if you want to buy a destressed house to fix and sell go to the hml. good rule of thumb

May I ask why a No Doc loan is bad for rehab? This doesn’t make any sense. Please explain this.

Bankers and Lenders do not like to give loans on rehabs, sure you can get the loan to purchase the property for the current Fair Market value. The next problems if you have to do a $20,000 kitchen remodel where are you going to get the money? HML typically want first position on the property not second, although there are some out there, or so I hear? When you have a working relationship with a HML you can act quicker on the bank or HUD repos, closing in less than two weeks.

If you have a no doc loan that will allow you to purchase a house with money to remodel you could have a lot of business. I have applied for rehab loans from banks and they take the application pretty much knowing they will not be able to do the loan. Then you spend a lot of time getting them the information, you wait a week and get a rejection. Time is money in rehabbing. I have not even found a local mortgage broker that does much with the no doc loans.


My broker can get me no doc loans for rehabs at 80/20 so it takes care of 100% of the purchase price. You can then refinance a month later at appraisal value to take money to do more repairs, etc… He can even get to to where you don’t make a payment for the first 2 months. The bank he works with will let you have up to 10 of these going on at once. It is 30 year ammoritzation and you don’t have to worry about a 12 month deadline, take as long as you want. Rates right now are about 7.5% on the 80% loan and 11% on the 20% loan. The bank just goes by your credit score and the loan amount compared to value of the property. Plus my mortgage broker can do loans in both Utah & California.

So they do to different loans one for 80% and one for 20%. I am assumming that you pay the points and fees when you purcase at the original price and then they chage point and fees when they refinance? How do they finance the repairs? Will they give you cash out when you complete the second refinance? This might work work if you were doing a minor rehab that was completed in less than a month? If they did cash outs on the second refinance this would work well for rental properties that you wanted to fix up? Or am I missing something?

To bad they don’t work in the State of ND?LOL

Thanks for the Info!

I am not sure about points, I will have to look into that. I know that he does not charge me origination for the refinance and YES you can cash out all the equity with your new appraisal if you wanted. My broker only charges fees for the inital loan not the refinance. :slight_smile: Amy

That sounds like it could be a pretty good program! Let us know how it works out?


have you done one of these deals with this guy or has it just been talked about. to me it still dosent make sense. i would rather pay a hml 5 points one time and get ALL the money for the purchase and the rehab, than go through 2 closings, 2 apprasials, etc. not to mention the fact that your still comming out of pocket for the rehab. the only way to get enough money in the refi is to do a crap load of work in a month to gain enough equity to make it worth it. no thaks, give me that 12% rate with 5 points all day. at least i have nothing out of pocket and i can relax and complete the project in 6-12 months. also, once you do this a couple of times, and the hml starts trusting you, the money becomes eaiser to obtain. pretty soon your getting a check in a week. try doing that with a bank. i still say no docs are great for buy-and-hold, but for a flip there is nothing better than a hml.

and im a mortgage broker so i shouldnt even be saying that.
but the truth is the truth.


I also have many lenders who allow up to 10 loans to close at once. At present, one of my borrowers has 14 investment loans going through me… all no doc…

So yes, I use this technique.

ND Investor:

You are wrong. As a mortgage broker representing hundreds of banks and lenders, we love to lend money. We have no problem lending on rehab loans. The trick is having the “know how” and the ability to put the deal together properly and sending it to the “right” lender.

What do you mean by “rehab”? Is the property gutted? Does the appraisal stand on its own with some value? Does the property need touch up cosmetics? You need to be more defined in your use of this word as there are creative ways around “rehab”. A mortgage professional should know this. Maybe you haven’t come across anyone in ND who knows anything about no doc investment purchases…

If the property is “gutted”, “empty”, “skeleton”, “burnt through” well then, yes we would have a problem lending on that type of property. Wouldn’t you? Have you ever walked through a house that was burnt completely through with holes in the roof, missing floor boards, partial brick walls with bird nests halfway in the living room and halfway in your backyard and then said, " You know, I could lend money on this house at 6%, fix it up and I don’t even have good credit." No, I don’t think so. Banks and Lenders are not in the business of lending you a dollar so you can chase your pipe dream. Underwriters use “collateral” when approving funds for lending for a reason.
I have a no doc loan that will allow you to purchase a house with money to remodel.


The appraiser shouldn’t charge another full price for the refinance after the rehab. $100 should suffice.

You’d rather pay someone 5% up front with a 12% interest rate and a balloon? 6-12 months to complete the project? You think hard money lending is offering you a better deal?

absolutly its a better deal. ask any seasoned investor what they prefer and i guarantee you most will say a hml. (the smart ones anyway)

keep telling your clients to get a rehab loan through you and while the file is in underwriting i’ll already have a demo crew at the property.

thats the major problem. you cant tell me that its faster to get a no doc loan. there is to much comp out there to be waiting for an approvial. not to mention that if i say to the seller i am putting in an all cash offer and you will have your money in one week, i have the power to ask for a break on the price. i WILL get a better deal.

i’m not tring to sell my services on this sight, i’m giving honest answers that real estate investers are a looking for.