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TERMINOLOGY
A no doc mortgage is often used by a borrower who can not disclose all of their income information to the lender. The lender will base their loan decision on the borrower’s credit rating, and the amount of equity in the property. If you decide you want a no doc mortgage, you must be prepared to pay a higher rate of interest for this convenience.
Tip #1: Maintain a pristine credit rating
Most lenders will not consider you for a no doc mortgage loan unless your credit rating is near perfect. If you want a no doc loan, payoff your installment loans before applying. Also, pay down your credit card balances so that your monthly payments are reduced.
Tip #2: Save a sizeable amount for your down payment
Since the lender will make their loan decision based only on your credit and equity in the property, you will typically need a large down payment, unless you are buying the property for well below the appraised value. The lender will tell you the exact amount you must put down in order to qualify for a no doc mortgage under their loan guidelines. Most often, you will be required 25 % down.
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