Low / No Documentation Loan

Filed Under »
Dictionary Says

Definition of 'Low / No Documentation Loan'

A category of loans which generally fall into the Alt-A sector of mortgage lending that gives borrowers the ability to state a limited amount of information on their mortgage application. Limited income, employment or asset information may be required depending on the specific type of low documentation loan; however, in some cases, the borrower may not need to provide them at all. There are subtle differences between various low documentation and no documentation loan programs offered by mortgage lenders.
Investopedia Says

Investopedia explains 'Low / No Documentation Loan'

Alt-A mortgage lending typically depends heavily on a borrower's credit score (FICO score) and the mortgage's loan to value ratio (LTV) in determining the borrower's ability to repay the mortgage.

A borrower should not be steered to a low documentation or no documentation loan by a mortgage lender in order to speed up the loan application and approval process. Low and no documentation loans usually have a higher interest rate than what can be obtained when income and assets are listed and verified. A little work in gathering information can save a lot of money over the long-term.

Articles Of Interest

  1.

    Understanding Your Mortgage

    We walk through the steps needed to secure the best loan to finance the purchase of your home.

  2. How Mortgage Refinancing Affects Your Net Worth

    Find out how to determine whether refinancing will put you ahead or even more behind.

  3. 6 Questions To Ask Before You Refinance

    Refinancing your mortgage can be a quick way to save on payments, but it's not for everyone.

  4. Self Employed? 5 Steps To Scoring A Mortgage

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

  5. 4 Steps To Attaining A Mortgage

    It starts with knowing your choices as well as your price range. We show you how to get there.

  6. Understanding The Mortgage Payment Structure

    We explain the calculation and payment process as well as the amortization schedule of home loans.

  7. How Interest Rates Affect The Housing Market

    Understand how rate changes can affect home prices, and learn how you can keep up.

  8. 6 Tips For Selling Your Home Fast

    Find out what you can do to stand out from the competition and make your home an easy sell.

  9. 5 Smart Ways To Use Your Tax Return

    This year, find out how to stretch your tax refund further to strengthen your future.

  10. Common Liabilities That Hurt Your Net Worth

    Every penny that you keep out of the liability side of the net worth equation essentially ends up on the asset side.
comments powered by Disqus
Marketplace
Hot Definitions

  1. Yield Elbow

    The point on the yield curve indicating the year in which the economy's highest interest rates occur. The yield elbow is the peak of the yield curve, signifying where the highest interest rates occurred.

  2. Xenocurrency

    A currency that trades in markets outside of its domestic borders.

  3. Wanton Disregard

    A standard of severe negligence. Wanton disregard is a very serious accusation that indicates that a person behaved extremely recklessly.

  4. Ultra ETF

    A class of exchange-traded funds (ETF) that employs leverage in an effort to achieve double the return of a set benchmark.

  5. Toehold Purchase

    A purchase of less than 5% of a target company's outstanding stockmade by an acquiring company. A toehold purchase of just under 5%, while not a significant stake in a firm, allows the shareholders a "toe-holds" grip on the company and its decision making.

  6. Samurai Bond

    A yen-denominated bond issued in Tokyo by a non-Japanese company and subject to Japanese regulations.
Trading Center
http://sp.fastclick.net/ad/tr/10858-64082-15546-0?mpt=fd12353f445c449391ec4ce815da95a3