My No Doc Jumbo Loans Blog

During the real estate boom many home buyers, particularly self-employed people were able to get a mortgage in the form of a stated income loan despite not showing sufficient income on their tax return. As a result of the sub-prime implosion and subsequent housing crash, mortgage lenders abruptly stopped doing these loans even for home buyers with stellar credit.

So what’s a home buyer who is self-employed (or not) that doesn’t have enough documentable income to do? They simply look to who has the most to gain from them buying a home, the home seller and there are hundreds of thousands of them. Surprised?

Here is something even more surprising. Many home sellers who can and are willing to do owner financing, 1) Will accept a down payment of 10% or even less, 2) Will accept interest rates of, 5%, 6% and 7%. I’ve even seen many below 5%, 3) Very rarely want any income documentation, and 4) Rarely pull credit. I know this is hard to believe but home sellers are desperate to sell their property and as a private note buyer, note holders come to me every day wanting to sell a note. With a bit of effort, you should be able to find a nice home where the seller will offer owner financing. Below are a few tips for finding and securing one of these loans.

1. Of course, the easiest way is to look for ads or signs on homes for sale that say, “owner financing available”.
2. The next best way is to look for homes that have been on the market a while that aren’t bank owned. Vacant homes are ideal. You can also dramatically increase the odds of getting a seller to offer owner financing if they have no mortgage or only a small mortgage on the property. The local tax office or a real estate agent can help you on this.
3. Although I have seen plenty of owner-financed sales with less of a down payment, I would recommend you pull together 10% to 20%. Another nice thing about private owner financing is they don’t care where the money comes or that it has been seasoned a certain amount of time like traditional lenders.
4. I would recommend you have a recent copy of your credit report just in case they ask but I wouldn’t volunteer it.
5. Be careful if the seller wants a balloon payment in too short a period of time. I would shoot for a balloon of 7 years. The last thing you want is to have to refinance before you either a) show enough documentable income or b) have gotten any credit problems straightened out.

There you have it, where and how to find a stated or what may be better described as a no income verification loan.