A No Income Verification Loan, also known as a Reduced Document Loan or a Stated Loan, was a very popular loan option in Fairfield County, CT at the height of the real estate market when borrowers with even a very low credit score could obtain a stated income mortgage. Reduced document loans are much harder to find today, as they are riskier to both borrowers and lenders in Fairfield County, CT.
When you are able to find a lender in Fairfield County, CT who offers stated loans, expect a much higher rate which may be up to double the current average interest rate.
No income verification mortgages today are most popular with Fairfield County, CT self-employed borrowers who usually have difficulty qualifying for a typical mortgage because they have trouble documenting steady, stable income, or they receive income from several sources. In such cases, Fairfield County, CT lenders will view the applicant's debt-to-income ratio as too low to qualify for a mortgage. A stated mortgage uses different loan criteria that makes it easier for self-employed borrowers to qualify.
When you apply for a reduced document loan, your lender will want proof of employment as well as a letter from your accountant showing your share of ownership and your business name, if you are self-employed. You must also show that you have held steady employment for two years.
A Fairfield County, CT mortgage lender will need to verify your assets for the last two months with documentation of any deposits and withdrawals over this period. You may not use gifted funds for a stated loan, and you can be sure that your lender will go over your assets carefully to ensure you have sufficient reserves after closing. In many cases, this means a minimum of one year of mortgage payments in savings at closing.
Expect to put down a large down payment to secure a reduced documentation mortgage. Depending on the lender and the amount of the loan you are requesting, this may be 35% to 50%.
Fairfield County, CT Interest only loans have other requirements to be aware of, along with a high down payment and sizable assets and income. You will need excellent credit with a FICO score of at least 720. Most low doc mortgages are adjustable rate mortgages (ARMs), and you are typically limited to buying a single-family home or condominium.
While no income verification loans are harder to find than in the past, they are still available to well-qualified buyers.