No Income Verification Mortgage is a type of loan program in which the loan applicant discloses the amount of his income, but is not required to prove it to the lender bank. In other words, the applicant does not submit paycheck stubs, W2s, tax returns and the like throughout the loan process. The loan application is underwritten base on the borrower disclosed income and other qualifying criteria.The Debt-to-Income ratio of No Income Verification Mortgages is calculated based on the income disclosed on the loan application. Because of higher default risk with No Income Verification home loans, the interest rates may sometimes be higher. However, for home buyers with hard to prove incomes, a No Income Verification loan with a slightly higher interest rate may prove to be the savior in their quest for homeownership.
These types of loans are great for people who have hard to document income, are self-employed, and/or are commissioned employees. No income verification can be done by simply stating your income on the application and not providing the paperwork associated with it. Also, they can be done as a no ratio loan and your employer info. is written on the loan application but no income is disclosed whatsoever. Finally there are no doc. loans where no employment information and no income is completed on the loan application anywhere at all.
No Income loans were designed for people with an income, but the income may fluctuate due to investments or other factors. It was also designed for high income people, that are willing to pay a higher rate, for a No Income Mortgage to maintain their financial privacy. No Income will be listed as NINA (No Income No Assets), NIVA (No Income Verified Assets) or NISA (No Income Stated Assets).
