Low Doc Mortgage - NY Mortgage

Low Doc, Limited Doc, or Bank Statement Mortgage, is a type of mortgage program that does
not require the applicant to provide pay-stubs, W2's and tax returns. These terms are used
interchangeably and vary in definition from bank to bank. Stated Income and No Doc
mortgages can be considered Low Doc or Limited Doc loans. A little known Limited Doc
mortgage program is the Bank Statement mortgage, in which the applicant is asked to provide
6 to 12 months of bank statements to substantiate the income stated on the application, in
lieu of paychecks and tax returns.

Bank Statement mortgages are mostly used by homebuyers who own their own businesses
and those who work on commissions. Instead of using the home buyer's paychecks to qualify
for the home loan, the lender bank uses the net deposit within the last 6 to 12 months as the
average income. Depending on the Bank Statement loan programs offered by different
banks, some require 6 most current consecutive bank statements while other requires 12
months. Some treat the total deposits as income while other lenders subtract the withdrawals
from the deposits and consider only the net deposits as income. For small business owners
and commissioned professionals whose pay period and pay amounts are irregular, Bank
Statement home loans can be the most sensible mortgage program.

Bank Statement mortgages are usually not offered by large commercial retail bankers. They
are often niche mortgage products of "subprime" mortgage bankers and offered through
mortgage brokers.

The convenience and privacy offered with Low Doc loans often come at a price. This type of
mortgages usually carry a higher interest rate compare to Full Doc loans.

Limited Doc loan applicants need not have credit histories. Since lenders offering Low Doc
loan products are mostly non-prime banks, home buyers with impaired credit can often get
financing, provided other financial aspects, such as the Loan-to-Value ratio (loan amount
divided by property value) is reasonable.









			Registered Mortgage Broker - NYS Banking Department. Loans arranged through third party providers. This is not a commitment to lend. Loan programs subject to change without notification. Equal Housing Opportunity.