Financial statements, salaries, income proof, documents, paycheck, W-2 forms, 1099's - there is an exhaustive list of some of the forms that you may require to provide for a loan. Income documentation is not always easy for someone who is self employed or retired or for any person who doesn't have a fixed source of income. Undocumented income can get good gains in the context of tax deductions. However, it might frustrate a loan borrowing attempt because the loan borrowers usually require two to three years of employment proof even for self employed. A no income verification loan can counter this situation when you can't adhere to conventional loan demands. These loans are applicable to everyone and not just self employed people.
No income verification loans have three basic types - stated income loans, no ratio loans and no document loans or NINA (no income/no asset verification).Stated income loans are for those who work and draw wages but not regular wages like that from an employer. These loans work for those who are self employed or those who make their living from commissions and tips. With stated income loans, income for the past two years has to be stated. You would have to show some bank statements, tax returns. For the lender it is required to calculate debt to income ratio. That's the percentage of gross income that is used to pay off debt.
The no income loan doesn't require you to declare your income. There is no requirement of tax returns, pay checks and W2 forms. The lender doesn't calculate debt to income ratio. But this 'no income verification loan' requires you to list asset like bank balances, property, business ownership, stock and bonds. This no income substantiation works well for someone who owns more than one dealership. Significant change like retirement, job change, divorce, death of a spouse can necessitate no income verification loans.
Interest rates for no income authentication loans are usually higher. The interest rates are dependent on down payment, credit history, the availability of assets and the openness in giving out information about property and job. It is meant for those who have been paying their bills on time.