DEFINITION of 'Alternative Documentation'

A documentation process designed to expedite loan approval where the lender accepts from the borrower documents such as W-2s, paycheck stubs and bank statements as verification of income made on the loan application. Confirming a borrower's information in this manner is considerably quicker than the traditional method of verifying such information with third parties.

BREAKING DOWN 'Alternative Documentation'

Alternative documentation is a "full documentation" loan. In other words, income, assets, employment, etc, are documented as opposed to a "stated income stated asset" (SISA) loan. There is generally no increase in the interest rate associated with alternative documentation as there typically is with "stated" loans.

RELATED TERMS
  1. Stated Income / Stated Asset Mortgage ...

    A type of reduced documentation mortgage program which allows ...
  2. Questioned Document Investigation

    An in-depth look into a document which is being questioned in ...
  3. Mortgage Application

    A document submitted by one or more individuals applying to borrow ...
  4. Standing Loan

    A type of loan where payments are made of interest only. Repayment ...
  5. Liar Loan

    A category of mortgages known as low-documentation or no-documentation ...
  6. Commercial Loan

    A debt-based funding arrangement that a business can set up with ...
Related Articles
  1. Tech

    Get Approved for a Mortgage in an Hour

    The traditional mortgage approval process takes 2-4 weeks, but tech companies have reduced the time to get approved for a mortgage to less than one hour.
  2. Personal Finance

    How To Apply For a Personal Loan

    Learn about different avenues for applying for a personal loan, and learn valuable tips to help you get your personal loan application approved.
  3. Financial Advisor

    Tips To Improve Chances Of A Small Business Loan

    Enhance your small business loan eligibility by keeping these important tips in mind.
  4. Personal Finance

    Understanding Loans

    A loan is the act of giving money, property or other material goods to another party with the expectation of being repaid.
  5. Retirement

    Business Owners: A Guide To Qualified Retirement Plan Loans

    Thinking of adding a loan feature to your company's plan? Here's what you need to know.
  6. Personal Finance

    Personal Loans: To Lend Or Not To Lend?

    Attempting to help a loved one with a cash loan can put a strain on your relationship - and your bank account.
  7. Small Business

    Lending Clubs: Better Than Banks?

    If you need to borrow money and your credit is making it tough, this new option may be just what you're looking for.
  8. Personal Finance

    Mortgage Pre-Approval: Understanding the Process

    Understand the mortgage pre-approval process and why getting a pre-approved mortgage is important for would-be homeowners. Also learn how to be approved.
  9. Personal Finance

    Personal Loans: Consider These Alternative Lenders

    Looking for an alternative source of financing for a personal loan? Take a look at these companies.
  10. Personal Finance

    Getting A Loan Without Your Parents

    Use the 5 "W"s to finance your dreams without banking on a second signature.
RELATED FAQS
  1. What are the GAAP standards for digital document storage?

    According to Sarbanes Oxley Act (SOX), companies are required to keep all documents that contain information about a company's ... Read Answer >>
  2. Are secured personal loans better than unsecured loans?

    Read about the differences between secured loans and unsecured loans and how they are used. Learn about forms of collateral ... Read Answer >>
  3. What are the pros and cons of life insurance policy loans?

    Find out the pros and cons of borrowing against your life insurance policy to help you decide if this loan type is the right ... Read Answer >>
  4. How can I change my name on my Social Security card?

    Learn what documents are needed to change your name on your Social Security card whether you are a natural-born or foreign ... Read Answer >>
  5. What are the differences between delinquency and default?

    Find out more about loan delinquency, loan default, and the difference between a loan borrower defaulting and being delinquent ... Read Answer >>
Trading Center