No Documentation Mortgage - No Doc
What is 'No Documentation Mortgage - No Doc'
A type of reduced-documentation-required mortgage program in which income and assets aren't disclosed on the loan application and employment isn't verified. However, a credit check is typically required as lenders are counting on the fact that the borrower has a good credit history. No doc mortgages usually fall into the Alt-A classification, and tend to carry a higher interest rate and require a higher down-payment than a prime mortgage.
BREAKING DOWN 'No Documentation Mortgage - No Doc'
In some circumstances, borrowers may be enticed to use a no doc mortgage in order to obtain a mortgage they wouldn't otherwise be able to afford. A borrower should not be persuaded by a lender or mortgage broker to use a no doc mortgage when a more traditional mortgage is reasonably available at a lower interest rate.
A possible use of a no doc mortgage is by a business person who is moving a business from one community to another and has no income or assets that can be documented or verified.