No Qualifying, Stated income, No doc, No Income Verify

RECENT CHANGES: Because of whats happened in the markets and the downturn of real estate values coupled with high foreclosure rates, there are not many 'stated income' programs left and some that are available have higher rates and lower loan to values than in the past.

You may have heard the following terms: 'Easy Qual', 'N.I.V.'(No Income Verification), 'Stated Income', 'No Stated Income', 'E.Z. Doc', etc. Those terms mean different things. These loans were originally developed for self-employed people because they have more tax schedules to bother copying, and they usually have many more ways of sheltering their income by writing off expenses. Some lenders consider the loan to be a full qualifier (then give a better rate) if you simply have gross deposits into your checking account that equal the monthly income needed to qualify.

These loans were NOT intended to have borrowers (or their mortgage agents) lie about the amount of income put on the loan application. You were supposed to use your gross taxable, again, because you probably had a million ways of using the tax system but really made the money. Many abused these types of loans so lenders require borrowers to sign an I.R.S. release form at closing that allows the lender to actually pull the taxes and check later.

Some things to watch out for -- your mortgage agent should know these -- lenders have some other requirements on the No Income Verification type loans. These can include the borrower needing to have a certain amount of LIQUID assets in the bank already, even if the loan is to take cash out of the homes equity. The liquid assets are called RESERVES, and can vary from 2 to 6 months total house payment, to 2 to 6 months monthly stated income! That can mean that you have a nasty surprise at closing if your agent doesn't have the correct information. Remember that there are few free lunches in the world -- the rates go higher when the lender makes it easier for you. You do NOT get regular conforming rates on NIV loans.