Alternative income verification loans are mortgages which involve lenders who do not utilize conventional documentation to validate the income of a borrower. Some refer to these loans as low-doc or no-doc loans.
Participants who desire to borrow capital via these types of loans are typically self-employed (such as owners of small businesses), while some are simply investors with income-documentation issues.
Relative to small business owners, these loans are great when business growth cannot be seen in a previous year’s financials, which also may not be finalized and can show a big expense that a business may no longer be paying.
Through alternative income verification loans, borrowers are allowed to present non-traditional forms to verify their income to prove they’re capable of repaying a loan. Furthermore, these loans can possess stiffer protocols than traditional loans, including greater requirements for liquid assets.
Alternative income verification loans are ideal self employed loans for purchasing or refinancing a property without the need to present their bank statements and tax returns. Even those who are in the low-income category can find alternative income verification loans more beneficial than many traditional loan programs.