Woman laughing while holding phone

No Doc Mortgages, Evolved.

Share on facebook
Share on twitter
Share on linkedin
Share on email

Life isn’t one size fits all, and mortgages shouldn’t be either. No-Doc mortgage loans were created for borrowers with nontraditional income sources and have been denied by other lenders, simply because of the lack of paperwork. Learn more about the history of no-doc mortgages, their evolution, and how Quontic is working hard to help the historically excluded make homeownership happen. Our unique Community Development loan programs level the lending playing field for those who previously were not able to receive a home loan approval.

What are No Doc Mortgages?

No doc loans, short for no documentation loans, are mortgages that require little to no paperwork to qualify. Lenders don’t have to consider tax documents like W2s or tax returns but can accept bank statements as a sufficient form of proof of income. Also called no income verification loans, these mortgages are a great resource for self-employed borrowers. These loans can be used for a home refinance, to buy investment properties, or serve as a mortgage for an owner-occupied home as well.

How is a No Doc Mortgage different from a traditional mortgage?

Outside of both having the same benefit of securing a home loan, No Doc mortgages have a few key differences from a typical conventional loan. While the loan process doesn’t require stacks of paperwork, the borrowers’ credit score and down payment requirements are typically higher than a conventional mortgage. For example, to qualify for Quontic’s No Ratio program, borrowers need to have a minimum credit score of 680. This loan program also requires a down payment of at least 25% of the home’s value.

Why aren’t No Doc mortgages still popular?

Previously, lenders would extend mortgages to borrowers who didn’t prove they were financially fit to repay the loan, which eventually led to the financial crisis of 2008.  During this dark time, subprime homeowners weren’t about to make their mortgage payments because of the lack of employment. Due to this, federal regulations like the Dodd-Frank Act were put in place to make sure a similar crisis never happens again, thus ending the long period of No Doc mortgages.

Fortunately, only 3% of lenders are still allowed to provide low-doc or no-doc mortgages in efforts to serve those who have been economically excluded from homeownership. As a CDFI, our mission is to offer home loans to diverse, underbanked individuals and families. We look beyond standard loan qualification metrics associated with traditional income and employment verification like paystubs and tax returns. Instead, we consider the borrower’s overall financial and credit profile. We provide different types of loans like No Ratio, Lite Doc, and Asset Utilization loans for borrowers with good credit history.

Are there disadvantages to a No Doc Mortgage?

When it comes to No Doc mortgages, there can be a few drawbacks for some customers. For instance, these types of loans aren’t offered by all lenders.  It might be hard finding a lender that offers no-doc or low-doc mortgages because of the financial undertaking and risks associated. Additionally, lenders might call one of their products a “no-doc” loan if it has less strict requirements, but doesn’t quite fit the bill to be an official “No Documentation” mortgage by still requiring stated income. Lastly, No Doc Mortgages require the borrower to be upstanding in other areas of qualification, such as credit history and having the cash flow for down payments, closing costs, and reserves.

What type of home buyers benefit from No Doc Mortgages?

Fortunately, there are a lot of potential homeowners who can benefit from No Doc or Low Doc mortgages. As a lender that’s licensed in all 50 states, our Community Development loans are a great solution for those who have been turned away by other lenders. These mortgage programs are perfect for borrowers who are:

  • Retired
  • Real estate investors with complex income who deserve a simplified underwriting process.
  • Immigrants, minorities, and foreign nationals sharing or pooling extended family resources.
  • Borrowers who are self-employed, work off commission or tips
  • Independent contractors with difficult-to-document income sources.
  • Recently self-employed business owners without a full year of income statements
  • 1099 workers

How can I apply for a no income verification mortgage?

If one of these potential homeowner situations sounds like you and you want to learn more, Quontic could hold the key to your homeownership dreams. We’re the mortgage lender for those who have been denied a mortgage, turned away because of documentation, or need help qualifying based on their financial background. To get started on your home buying journey, learn about our mortgage rates, begin your loan application, or determine if one of our unique loan programs would work for you and your family, speak to a loan expert today.

Does Quontic offer No Documentation loan programs?

While Quontic doesn’t offer the typical “no-doc mortgage”, we have loan programs that consider alternative income documentation.  We’re a designated Community Development Financial Institution, which means we can provide access to home financing for untraditional borrowers, what we call Community Development loans. One of our most popular Community Development loans is the Owner Occupied No Ratio Loan.

Quontic’s Community Development mortgage loans provide non-traditional access to homeownership. Borrowers can qualify with excellent credit history, a willingness to repay debts on time, a good FICO credit score, and are able to put down as little as 25% for their down payment (p.s., the entire down payment, closing costs, and reserves can be gifted). The best part of it all, we don’t need to verify income nor do we need to verify employment. All in all, these loans have fewer requirements which provides our customers with a faster and smoother loan process.

When the best time to apply for a No Doc Mortgage?

The best time to apply for Quontic’s No Ratio loan program is…NOW! With interest rates at the best we’ve seen in years, there’s no better time to start your loan application. Don’t let the fear of tax documentation, income verification or any other mortgage myth hold you back. Quontic is the lender you’ve been looking for. Pre-qualify for your home loan by visiting the Quontic website today.

Share this article

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on email
Email

Share this article

Share on facebook
Share on twitter
Share on linkedin
Share on email
pillar-page -curious
Curious about the home buying process?

Mortgages are complicated. Let Quontic simplify it for you.

Related Resources
Ready to reach your financial goals?

Disclaimer:
Ask for or details. Additional terms, conditions, fees & exclusions may apply. If the account is closed before interest and/or bonus is credited, accrued interest and/or bonus may be forfeited for that statement cycle. Fees could reduce earnings. In order to sign up for online banking, you must have a Quontic Bank account. Mobile banking requires enrollment through online banking. Data connection required. Wireless carrier fees may apply. There is no charge from Quontic Bank for account alerts, but message & data rates may apply. Mobile check deposit is available for select mobile devices. Subject to eligibility & further review. Deposits are subject to verification & not available for immediate withdrawal. Deposit limits & other restrictions may apply.

Online Account Opening is only available to consumers. Ask for details. Data connection required to open an account online. Wireless carrier fees may apply. Application is subject to approval & further review. Information is accurate as of the date listed below and may change without notice.

December 10, 2020

1 APY means Annual Percentage Yield.

2 Withdrawals before the maturity date are subject to penalties.