Here’s How to Finance a Property No Income Verification

Published:
November 5, 2021

Caption: Think you can’t invest in real estate property without income verification? Think again.

_ _ _ _ _

Let’s say you make this decision…

“I want to invest in real estate.”

What probably follows after that declaration is this question…

“How do I get a loan for an investment property?”

And what may follow right after that question are just a slew of even more questions…

“How do I start investing in real estate without any income verification? Is that even a thing? Can I even do that?”

The answers are yes, yes, and HELL YES.

It may seem impossible to get started in real estate without giving mortgage lenders any sort of income verification, but we are here to tell you that, indeed, it is very much possible. It’s called a “no-income verification mortgage.”

A no-income-verification mortgage is a home loan (whether you are talking investment property loans, rental property loans, or fix and flip loans) that doesn’t require standard income documentation, such as pay stubs, W2s or tax returns, for approval. The mortgage lender actually allows you to use other items, such as bank statements, to show that you can repay a mortgage.

Some of the reasons you might need a no-income-verification mortgage are:

*You are self-employed.

*You can’t easily verify your monthly earnings.

*You have sophisticated tax returns.

*You’ve had business expense write-offs over the past year.

*You have an irregular income.

*You file multiple tax returns.

*You have a high net worth, but no job.

*You just don’t want the hassle of providing a ton of earnings and income documentation.

So, if you have read any of the above and thought, “This is me,” then you might be in the market to get a no-income-verification mortgage loan. There are four main types of no-income verification mortgage loans, each with their own level of requirements:

A Rental DSCR Loan allows borrowers to use the rental income of their investment property to qualify for financing. We do not use personal or business tax returns. We look at the gross rental income and divide that by the Principal, Interest, Tax, Insurance and Homeowners Association (PITIA). As long as the ratio is 1.0 then we can fund the loan. We look to see that the property is at least breaking even. We can also look at the Market Rent Comparables to calculate the rental income of the property.

A Bank Statement Loan allows borrowers to use their Personal and Business Bank Statements to qualify for a mortgage. The mortgage lender does not have to look at tax returns, W2s, or pay stubs. This is a great alternative to conventional loans.

A 1099 Self-Employed Mortgage only looks at the borrowers 1099 statement or transcript for the last two years. This is the perfect loan for self-employed borrowers who write off a lot on their tax returns.

A Jumbo Loan is perfect for borrowers who are looking to borrower more than $900,000.00. We can use the last 12 months’ bank statements to derive income as opposed to using tax returns.

No-income and limited-income verification mortgages are worth exploring if you’re self-employed, have seasonal income streams, or otherwise have trouble qualifying for a conventional mortgage loan. All of these scenarios can make it complicated to document your income, which makes the simplicity of a no-verification loan ideal.

And while you won’t need your W-2s or your tax returns to get a no-income verification mortgage, you will need some paperwork. (It is the banking industry after all, ya know? They live off paperwork.) So, you will need some of the following:

*Bank statements or proof of deposit that will show the lender you have the cash needed for the minimum down payment required.

*Bank statements from all accounts from the last two years.

*Profit and loss statements from your business.

*A credit score of at least 650.

Also, most importantly, let’s just state the obvious; borrowers with insufficient income should not use no-income verification mortgage loans as a way to hide insufficient financial standing or lack of funds. You should only apply for a no-income verification mortgage if you can actually afford to make payments. These loans should be seen as a solution for cutting down paperwork, not for avoiding the question of affordability.

Here endeth the lesson.

Caption: Think you can’t invest in real estate property without income verification? Think again.

_ _ _ _ _

Let’s say you make this decision…

“I want to invest in real estate.”

What probably follows after that declaration is this question…

“How do I get a loan for an investment property?”

And what may follow right after that question are just a slew of even more questions…

“How do I start investing in real estate without any income verification? Is that even a thing? Can I even do that?”

The answers are yes, yes, and HELL YES.

It may seem impossible to get started in real estate without giving mortgage lenders any sort of income verification, but we are here to tell you that, indeed, it is very much possible. It’s called a “no-income verification mortgage.”

A no-income-verification mortgage is a home loan (whether you are talking investment property loans, rental property loans, or fix and flip loans) that doesn’t require standard income documentation, such as pay stubs, W2s or tax returns, for approval. The mortgage lender actually allows you to use other items, such as bank statements, to show that you can repay a mortgage.

Some of the reasons you might need a no-income-verification mortgage are:

*You are self-employed.

*You can’t easily verify your monthly earnings.

*You have sophisticated tax returns.

*You’ve had business expense write-offs over the past year.

*You have an irregular income.

*You file multiple tax returns.

*You have a high net worth, but no job.

*You just don’t want the hassle of providing a ton of earnings and income documentation.

So, if you have read any of the above and thought, “This is me,” then you might be in the market to get a no-income-verification mortgage loan. There are four main types of no-income verification mortgage loans, each with their own level of requirements:

A Rental DSCR Loan allows borrowers to use the rental income of their investment property to qualify for financing. We do not use personal or business tax returns. We look at the gross rental income and divide that by the Principal, Interest, Tax, Insurance and Homeowners Association (PITIA). As long as the ratio is 1.0 then we can fund the loan. We look to see that the property is at least breaking even. We can also look at the Market Rent Comparables to calculate the rental income of the property.

A Bank Statement Loan allows borrowers to use their Personal and Business Bank Statements to qualify for a mortgage. The mortgage lender does not have to look at tax returns, W2s, or pay stubs. This is a great alternative to conventional loans.

A 1099 Self-Employed Mortgage only looks at the borrowers 1099 statement or transcript for the last two years. This is the perfect loan for self-employed borrowers who write off a lot on their tax returns.

A Jumbo Loan is perfect for borrowers who are looking to borrower more than $900,000.00. We can use the last 12 months’ bank statements to derive income as opposed to using tax returns.

No-income and limited-income verification mortgages are worth exploring if you’re self-employed, have seasonal income streams, or otherwise have trouble qualifying for a conventional mortgage loan. All of these scenarios can make it complicated to document your income, which makes the simplicity of a no-verification loan ideal.

And while you won’t need your W-2s or your tax returns to get a no-income verification mortgage, you will need some paperwork. (It is the banking industry after all, ya know? They live off paperwork.) So, you will need some of the following:

*Bank statements or proof of deposit that will show the lender you have the cash needed for the minimum down payment required.

*Bank statements from all accounts from the last two years.

*Profit and loss statements from your business.

*A credit score of at least 650.

Also, most importantly, let’s just state the obvious; borrowers with insufficient income should not use no-income verification mortgage loans as a way to hide insufficient financial standing or lack of funds. You should only apply for a no-income verification mortgage if you can actually afford to make payments. These loans should be seen as a solution for cutting down paperwork, not for avoiding the question of affordability.

Here endeth the lesson.

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