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. Origination

    The process of creating a home loan or mortgage. During the origination ...
  3. Standing Loan

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

    A category of mortgages known as low-documentation or no-documentation ...
  5. Five Cs Of Credit

    A method used by lenders to determine the credit worthiness of ...
  6. Lender

    Someone who makes funds available to another with the expectation ...
Related Articles
  1. Small Business

    Steps to Qualify For a Small Business Loan

    Learn steps to qualify for a small business loan such as identifying financing needs, preparing a business plan and getting required documents.
  2. 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.
  3. 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.
  4. Financial Advisor

    Tips To Improve Chances Of A Small Business Loan

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

    5 Things You Need to Be Pre-Approved For a Mortgage

    Before you can get serious about buying a home, you need to get pre-approval for a mortgage. Learn what you need to speed up the approval process.
  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. Personal Finance

    Different Needs, Different Loans

    Find out what options are available when it comes to borrowing money.
  8. 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.
  9. 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.
  10. 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.
RELATED FAQS
  1. 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 >>
  2. 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 >>
  3. 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 >>
  4. Where can I get a company's prospectus and/or financial statements?

    These types of company documents have become increasingly accessible with the advent of the Internet. Most companies have ... Read Answer >>
Trading Center