How Beneficial Are "No Doc" Loans!
Posted on 11/7/2009 5:29:15 AM in #Finance | 0 comments comments
A number of lending institutes are offering mortgage refinance. Several options are open for a person, who wants to avail mortgage refinance loans. There can be certain reasons for refinancing mortgage. They can be, to receive cash at closing the current loan, to eliminate private mortgage insurance, or to obtain a fixed rate loan, etc.
A new mortgage is required to refinance home loan. Hence one requires all the documents, to present them to the financing company. However, there are ways to obtain loan with minimal documents.
One can make a comparison between the No Doc Mortgage Refinancing loans and low document refinance loans. To obtain no document refinance loan, the borrower should have good credit. There are some lending institutes that offer loan without any documents, where as some lenders are do not provide such services. The process of getting no doc loan is quite simple. The borrower has to provide the social security number along with the loan application and the loan amount. The approval of the loan is entirely based on the credit score. Hence to obtain No Doc Refinance, one has to have a very high credit score.
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The low documents are little different from no doc loans. To avail no doc refinance, the borrower has to submit few documents along with the loan application. These documents include income and employment history. For this a person can submit paychecks stubs or even the income tax return of the past two years can suffice the need. These loans can be beneficial to the contract workers or for people who are self employed. People who get the benefits of cash payments against their services can avail low doc loan.
Advantages of Mortgage Refinance with no doc
For those who want to maintain their privacy, no documents can serve the purpose best. There are some borrowers, who are diffident to provide their detailed information to the lending institutes. This information may include about one’s employment, income and financial situations. However, one has to have excellent credit history to obtain no doc loans.
Disadvantages of no document loan
The no documents and the low documents can be availed with privacy. However one has to be well prepared to pay high rate of interest. If the primary reason to refinance a loan is to reduce the interest rates, than probably no doc loan should avoid. This type of loan offers high mortgage refinance rate.
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