Mortgage Documentation Type

Mortgage Documentation Type is a risk-based pricing factor that effects the overall interes rate an individual borrower will qualify for. The general rule is that the less verifiable documentation a borrower provides, the more expensive the interest rate becomes. Below are some of the major categories of mortgage loan documentation:

Full Income Verified Asset is referred to as Income amount: Fully verified using the following authentic documentation types: The following are some examples:

Salaried. 2 most recent and concurrent yrs W-2. 2 most recent concurrent pay-stubs. 2 most recent and concurrent months bank statements (all pages).

Self Employed or other income types. 2 most recent and concurrent tax returns, 1040, Schedule C, and/or K-1. 2 most recent and concurrent months personal and business bank statements (all pages). Rental property. Tax returns. Leases, appraisal summaries with rent reports. Signed Verification of Employment are Required

Borrowers wishing to obtain any type of Stated documentation loan must usually provide proof of at least 2 years self-employment. Accepted proof includes: Letter from CPA stating your filing 2 yrs tax returns via CPA, 2 years most recent concurrent business licenses, or 2 years most recent concurrent tax returns (actual income numbers are traditionally blacked out), Schedule C, or K-1, whichever apply.

Stated Income Verified Asset loan Income Amount: Verbally stated by the borrower consistent with borrowers occupation (teachers typically don't make $100,000/year). Income must be stated high enough to qualify for mortgage using the programs standard Debt-to-income ratio.

Assets are fully verified by providing the two most recent and concurrent statements of any/all of the following account types:

Bank checking and savings (personal and business), 401(k), Traditional Brokerage Accounts (Stocks/Bonds), and/or IRA. Must equal anywhere from 2 to 10 months worth of subject mortgages total monthly payment or PITI. Number of months required is directly related to Property Use and Mortgage Loan Documentation.

Employment is verbally verified

Risk-based pricing adjustments increase cost of interest rate between .25% to 1%. Credit score driven.

Stated Income Stated Asset loan Income: Verbally stated high enough to qualify for the programs minimum requirements. Employment is verbally verified. Risk-based pricing adjustments increase cost of interest rate from .5% to 1%. Credit score driven. **IMPORTANT. Credit scores above 740 can qualify borrowers for a Stated Income State Asset loan with no Risk-based pricing adjustments with many lenders.

No Ratio- Income: Verified according to rules. Assets: Verified according to FIVA rules. Program asset reserve requirements are waived. Employment is verbally verified. Risk-based pricing adjustments increase cost of interest rate between .375% to .75%. Credit score driven.

No Doc- Income: Not stated or verified. Assets: Not stated or verified. Employment, income, and asset information is completely omitted from the 1003 application. Risk-based pricing adjustments increase cost of interest rate between 1.25% to 2.5%. Credit score driven.

A word about Reduced Documentation Loans: BEWARE, 'stated loans' are becoming a large problem under the realm of Mortgage fraud and Predatory lending tactics. Qualifying for a Stated Income Verified Asset loan comes highly at the discretion of the Broker, who is supposed to diligently verify that the subject borrower makes more in gross income than they can transparently document. Many times, self-employed borrowers take advantage of significant tax write-offs they may enjoy at the expense of 'proving' the income. The lender recognizes that the borrower COULD be taking home more money than the IRS taxes, however, many brokers use SIVA loans as a tool to qualify a borrower even though they may know the borrower does not meet income requirements. This is a version of mortgage fraud and should be avoided. Do not let a Broker put you in a SIVA loan if you do not make enough money (using the lenders prescribed DTI ratio as a benchmark) to make the mortgage payment. There are alternative stated documentation loans available. For more information contact a financing specialist at or via email at info@themortgageinfoguide.com.

For borrowers with superb credit, a No Doc loan can be aquired.

There are some loan programs where no income is stated or verified, nor are assets stated or verified. However, a 2 year employment history is verified. This is referred to as a NINA loan.

Self employed borrowers and business owners often have trouble choosing the best mortgage documentation type when applying for a purchase or refinance home loan, because their business or self employed status is difficult to verify. While most lenders will require borrowers to produce business licenses and other official document types, ask about our flexible self employed and business owner documentation programs, where employment may be verified with a letter from your CPA and a few additional proofs. Substantiating self employment or business ownership doesn't have to be hard. For more information contact a financing specialist at or via email at info@themortgageinfoguide.com