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. Low / No Documentation Loan

    A category of loans which generally fall into the Alt-A sector ...
  2. Stated Income / Stated Asset Mortgage ...

    A type of reduced documentation mortgage program which allows ...
  3. Origination

    The process of creating a home loan or mortgage. During the origination ...
  4. Mortgage Application

    A document submitted by one or more individuals applying to borrow ...
  5. Direct Consolidation Loan

    A loan that combines two or more federal education loans into ...
  6. Questioned Document Investigation

    An in-depth look into a document which is being questioned in ...
Related Articles
  1. Investing

    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. Financial Advisor

    Tips To Improve Chances Of A Small Business Loan

    Enhance your small business loan eligibility by keeping these important tips in mind.
  3. 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.
  4. 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.
  5. 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.
  6. Personal Finance

    Getting A Mortgage: How The Process Has Changed

    After the banking crisis, banks have tightened their lending standards. Find out how the current mortgage-lending standards have changed in the last five years.
  7. Personal Finance

    The 4 Worst Ways To Borrow Money

    While there are less risky places from which to borrow, there are also predatory lenders who can make your financial situation worse than it was to begin with.
  8. Insights

    An Introduction to Government Loans

    Government loans further policymakers' efforts to create positive social outcomes by offering timely access to capital for qualified candidates.
  9. Personal Finance

    Self Employed? 5 Steps to Scoring a Mortgage

    Convince lenders that you're a good bet despite your lack of a steady income.
  10. Personal Finance

    8 Top Alternatives to Car Title Loans

    Before you sign up for a car title loan, investigate these 8 alternate strategies.
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 do construction loans work?

    Construction loans are obtained either by the prospective home owner or the actual builder. There are two types of construction ... Read Answer >>
  5. What is the most important "C" in the Five Cs of Credit?

    Learn how the five C's of credit affect new credit application decisions, and understand how a lender analyzes each aspect ... Read Answer >>
Trading Center