Home Money Education     
Interactive Tools Budgeting & Money Managing Credit Home Ownership Banking & Cash Identity Theft
Low-Doc, No-Doc, and ITIN Loans

If you work for yourself or don’t get a steady paycheck from an employer because you work for commissions, or if you get your income in cash, you may not have the documentation to get a traditional mortgage. Other people prefer to keep their financial information private. Limited-documentation or “Low doc” mortgages are available for people in these situations.

In addition, some immigrants or foreign nationals do not have a social security number. Recently more banks have agreed to use an ITIN or Individual Taxpayer Identification Number for identification when you apply for a loan.

“Low Doc” and No-Doc”

The loans are called "low-doc" and "no-doc" mortgages because of the amount of documentation they require. Although they do require less documentation, some basic information is required. Some low-doc mortgages require the borrower to provide tax returns and profit-and-loss statements and even no-doc mortgages require at least a credit report and a property appraisal.

Keep in mind that you pay for privacy. The less documentation, the higher the interest rate. A no-documentation mortgage might cost up to 3 percentage points higher than a fully documented conventional mortgage. Even if you don’t think your income can be documented, work with a loan officer. A loan officer might be able to help you document what you think may be impossible to document.

There are three main types of low-doc/no-doc mortgages:

  1. Stated-income mortgages. With a stated-income mortgage, you must disclose two years of annual earnings, but you don’t need to provide income statements, pay stubs, or W2 forms. Instead, you provide tax returns, bank statements and profit-and-loss statements, if applicable.
  2. No-ratio loans. These loans don’t require you to provide pay stubs, W2s, or even tax returns for a no-ratio loan, but you do need to list assets, such as money in the bank, stocks and bonds, real estate, or ownership stakes in businesses.
  3. No-doc or NINA (no income/no asset verification) loans. These loans need the least documentation. In some cases you only provide your name, Social Security Number, the amount of the down payment and the address of the property being bought. Additionally, the lender will secure a credit report and a property appraisal.

ITIN mortgages

Another alternative mortgage available is the ITIN mortgage. ITIN mortgages are fairly new mortgage products developed for immigrants who do not have a Social Security number. In lieu of Social Security numbers, some banks accept individual taxpayer identification numbers (ITINs), that are issued by the IRS for tax reporting purposes. Banks may offer ITIN mortgages in various forms, including adjustable rate mortgages.