## No Doc Mortgages: A Primer
**Introduction**
No doc mortgages, also known as low documentation mortgages or LIENs (loans to individuals with extended income), are a type of mortgage that allows borrowers to obtain financing without providing traditional documentation of their income or assets. These mortgages were once popular among self-employed borrowers and others who had difficulty providing traditional proof of income. However, due to the subprime mortgage crisis of 2008, no doc mortgages are now much more difficult to obtain.
**How No Doc Mortgages Work**
No doc mortgages are typically offered by small, non-bank lenders. These lenders are not subject to the same regulations as banks, which gives them more flexibility in lending criteria. No doc mortgages typically require a higher down payment and interest rate than traditional mortgages.
To qualify for a no doc mortgage, borrowers must typically meet the following criteria:
* **Good credit score**
* **Low debt-to-income ratio**
* **Significant assets**
* **Proof of self-employment or other non-traditional income**
**No Doc Mortgages vs. Traditional Mortgages**
No doc mortgages have a number of advantages over traditional mortgages, including:
* **Less documentation required**
* **Faster approval process**
* **More flexibility for borrowers who have non-traditional income**
However, no doc mortgages also have a number of disadvantages, including:
* **Higher down payment**
* **Higher interest rate**
* **Greater risk of foreclosure**
**Are No Doc Mortgages Still Available?**
Yes, no doc mortgages are still available, but they are much more difficult to obtain than they were before the subprime mortgage crisis. Most banks and credit unions no longer offer no doc mortgages, and the few lenders that do offer them typically have very strict lending criteria.
**Who Should Consider a No Doc Mortgage?**
No doc mortgages may be a good option for borrowers who:
* Are self-employed or have other non-traditional income
* Have good credit and a low debt-to-income ratio
* Have significant assets
* Are willing to pay a higher down payment and interest rate
**Risks of No Doc Mortgages**
No doc mortgages can be risky, especially for borrowers who do not have a steady income or who have a history of financial problems. Borrowers who consider a no doc mortgage should carefully weigh the risks and benefits before making a decision.
**Alternatives to No Doc Mortgages**
There are a number of alternatives to no doc mortgages, including:
* **Bank statement loans**
* **Asset-based lending**
* **Private money loans**
These alternatives may be a better option for borrowers who do not qualify for a no doc mortgage.
**Conclusion**
No doc mortgages can be a useful tool for borrowers who have difficulty providing traditional proof of income. However, these mortgages are risky and should be carefully considered before making a decision. Borrowers who are considering a no doc mortgage should work with a reputable lender and carefully weigh the risks and benefits before making a decision.
## Frequently Asked Questions
**Q: What is a no doc mortgage?**
A: A no doc mortgage is a type of mortgage that allows borrowers to obtain financing without providing traditional documentation of their income or assets.
**Q: Who should consider a no doc mortgage?**
A: No doc mortgages may be a good option for borrowers who are self-employed or have other non-traditional income, have good credit and a low debt-to-income ratio, have significant assets, and are willing to pay a higher down payment and interest rate.
**Q: Are no doc mortgages still available?**
A: Yes, no doc mortgages are still available, but they are much more difficult to obtain than they were before the subprime mortgage crisis.
**Q: What are the risks of no doc mortgages?**
A: No doc mortgages can be risky, especially for borrowers who do not have a steady income or who have a history of financial problems. Borrowers who consider a no doc mortgage should carefully weigh the risks and benefits before making a decision.
**Q: What are the alternatives to no doc mortgages?**
A: There are a number of alternatives to no doc mortgages, including bank statement loans, asset-based lending, and private money loans. These alternatives may be a better option for borrowers who do not qualify for a no doc mortgage.