Board Topic: mortgage without proof of income?
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mortgage without proof of income?

Posted by: chris Oct 14 2003, 10:31 AM
I am newly self employed and have not worked for the past year. Is it possible to get a mortgage without being able to prove my income? My wife works, and is able to prove hers, but we need to take my income into account for the price range we seek.

Posted by: loanuniverse Oct 14 2003, 02:37 PM
Chris:

First let me state: I am not a residential lender! In fact, I am not even a commercial lender. I am a commercial credit analyst whose salary is not directly determined by whether or not we do the deal or not. My primary responsibility is to measure risk effectively so that top management can decide on loans or a course of action.

Having said that, yes it is possible that you will find a bank that will be willing to do a loan for you without income verification. However, it will come at a price.

The standard in home mortgages is the conforming loan. A couple of quasi-governmental agencies Fannie Mae and Freddie Mac are the two biggest buyers of mortgage loans. In order to qualify, you must provide a lot of information. This amount of information assures that your loan is properly qualified.

Now a loan such as the one you are looking for present problems to the lender. The risk can not be properly measured, and the lender can not readily sell it to the investors. This means that you will end up paying anywhere from 1% to 2% over the market rate for a conforming loan with your credit score being the main driver as to the rate and the loan to value. Of course, this is just an estimate... an educated guess

My suggestion: Shop around to find out the documentation requirements for different lenders and if possible the required credit scores. Also check your credit report for accuracy and to check the score.

Hope this helps.
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