Get The Best Home Mortgage Loans
There are different options available if you plan to refinance your current mortgage. Now, why would homeowners want to refinance their mortgage? There are actually many reasons for that, and the most common are: to receive cash out at closing, eliminate private mortgage insurance, and obtain a fixed rate.
Taking a new mortgage is somehow involved in home loan refinancing so you have to have the important documents to present the mortgage company. But there are also ways for you to obtain a loan with minimal documents if you want to protect your privacy.
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.
Now, if you think low document home mortgage loans are quite the same as no document loans, you’re wrong. Low document loans require the applicant to supply recent paycheck stubs or income tax returns for the past two years. The income and employment history of the applicant have to be stated as well. These types of loan programs suit the self-employed or contract workers well and those individuals 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.
Since low doc and no doc home mortgage loans undergo a faster process, the applicant has to be prepared to pay a higher interest rate on his loan. Of course, a higher rate would be fine as long as it offers the individual some privacy and speed.
But if the applicant would want to refinance his home mortgage loans just to get a lower interest rate then probably, this no doc loan would not be a good option. The individual should always get a quote from a lender and have the refinance rate of the no doc loan compared with his current interest rate.