Taking Home Mortgage Loans
Planning to refinance your current mortgage? There are actually several options that are available for you. There are also a number of reasons to why homeowners would want to refinance their home mortgage, and that includes: obtaining a fixed interest rate, eliminating private mortgage insurance, receiving cash out at closing, and so many others.
Since home loan refinancing would involve taking a new mortgage, mortgage companies require you to present various documentations. But if this somehow makes you uncomfortable, you can now obtain a loan, which needs minimal documents.
The best way to have some privacy is getting a no doc refinance loan. However, not all lenders are the same as some are okay with granting a refinance with no documentations, there are also others that are not willing to take any chances. In getting a no doc loan, the process is quite easy; the homeowner will just have to give out their social security number and loan amount on the loan applications. Now, it is entirely up to the lender to give loan approval that is based on the credit scores. In simple terms, to have a no doc loan, your credit score should be very high.
So as not to be confused, low document home mortgage loans are different from the no document loans in several ways. First, you need to state your income and employment history in low document loans. You are also asked to submit recent paycheck stubs or income tax returns for the past two years. Second, low document loans are beneficial to contract and self-employed employees and to those who receive cash payments.
Obtaining a no document refinance loan is ideal for individuals who would want to maintain their privacy. Some people are hesitant to offer lenders detail information about their income, employment, and finances.
Now, why are people with very high credit scores make ideal candidates for a no doc loan? While lenders may not be really happy approving loans with less or no documentations, they find people with good credit reports unlikely to tarnish their perfect records.
When you do opt for a no doc or low doc home mortgage loans, just be prepared to pay a higher interest rate on your home loan. Of course, a higher interest rate may be well worth it if it means getting some privacy and faster processing.
However, if your primary reason for refinancing home mortgage loans is to obtain a lower interest rate on your mortgage, a no doc refinance may not be the best option. Before refinancing, do get a quote from a lender and compare the no document refinance rate with your current interest rate.
Since home loan refinancing would involve taking a new mortgage, mortgage companies require you to present various documentations. But if this somehow makes you uncomfortable, you can now obtain a loan, which needs minimal documents.
The best way to have some privacy is getting a no doc refinance loan. However, not all lenders are the same as some are okay with granting a refinance with no documentations, there are also others that are not willing to take any chances. In getting a no doc loan, the process is quite easy; the homeowner will just have to give out their social security number and loan amount on the loan applications. Now, it is entirely up to the lender to give loan approval that is based on the credit scores. In simple terms, to have a no doc loan, your credit score should be very high.
So as not to be confused, low document home mortgage loans are different from the no document loans in several ways. First, you need to state your income and employment history in low document loans. You are also asked to submit recent paycheck stubs or income tax returns for the past two years. Second, low document loans are beneficial to contract and self-employed employees and to those who receive cash payments.
Obtaining a no document refinance loan is ideal for individuals who would want to maintain their privacy. Some people are hesitant to offer lenders detail information about their income, employment, and finances.
Now, why are people with very high credit scores make ideal candidates for a no doc loan? While lenders may not be really happy approving loans with less or no documentations, they find people with good credit reports unlikely to tarnish their perfect records.
When you do opt for a no doc or low doc home mortgage loans, just be prepared to pay a higher interest rate on your home loan. Of course, a higher interest rate may be well worth it if it means getting some privacy and faster processing.
However, if your primary reason for refinancing home mortgage loans is to obtain a lower interest rate on your mortgage, a no doc refinance may not be the best option. Before refinancing, do get a quote from a lender and compare the no document refinance rate with your current interest rate.
posted by Credit Counseling at
9:40 AM
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