Home Loan Without Income Documents – No Ratio & DSCR
Looking for a home loan without income documents? Over the past few years, terms for the no ratio and debt-coverage ratio mortgage have come a long way.
What is the home loan without income documentation? The debt-coverage ratio mortgage allows a borrower to buy an investment property without taking personal income into account. For most of these programs, the higher the ratio, the more aggressive the terms are going be.
The equation for calculating the debt-service coverage is:
Rent / (Principal and Interest (P&I) + Taxes + Insurance + Homeowner’s Association Dues (HOA)) = Debt-Service Coverage Ratio
Rental income is determined by the lesser of:
- Fair market rent prepared on a rental addendum by an appraiser.
- The actual rent for which the property is leased for.
A property can be vacant but must meet conventional loan appraisal requirements. Condotels and non-warrantable condominiums are eligible property types for the debt-coverage ratio mortgage.
Investment Mortgage No Income
The minimum down payment for the debt-service coverage loan starts at 15%, but depends on:
- Credit score.
- If you own your primary residence, live rent free, or can verify 12-month rental history.
- Purchase price.
- Loan amount.
- Property type.
- Debt-service coverage ratio.
Cash out and rate and term refinance mortgages are also available for this home loan without income documentation. This loan is considered an investment non-qualified mortgage, but there are traditional no income refinance loans for primary residences.
Traditional No Income Refinance Loans
The two traditional no income refinance loans are VA interest rate reduction refinance loan and FHA streamline refinance.
VA interest rate reduction refinance loan (VA IRRRL) – refinancing an existing VA loan with no income documentation.
FHA streamline refinance – refinancing an existing FHA loan without income documentation.
The FHA and VA streamline requires a borrower to meet a net tangible benefit.
Looking for a Home Loan Without Income Documents
Some examples of loans that do not require income:
- Debt-coverage ratio mortgage for investment properties.
- No ratio mortgages for investment properties.
- VA interest rate reduction refinance loan (VA IRRRL) for veterans.
- FHA streamline.