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No Docs, No Problem: The No Documentation Loan Program

No-docs shorts for no-documentation were a type of mortgage loan that gained popularity in the early 2000s during the housing boom in the United States. These loans were designed to simplify and expedite the mortgage application process by requiring little to no documentation of the borrower's income, assets, or employment. No-docs loans are sometimes referred to as "no-ratio" or "low-doc" loans.

Key features of no-docs loans included:

Limited Documentation: Borrowers were not required to provide detailed income and asset documentation, such as tax returns, pay stubs, or bank statements. Instead, lender will offer rate based on borrowers’ credit score and down payment.

Higher Interest Rates: To compensate for the increased risk associated with limited documentation, lenders typically charged higher interest rates on no-docs loans compared to traditional mortgage loans.

Limited Eligibility: Borrowers who qualified for no-docs loans typically had good credit scores and substantial down payments. The loan-to-value ratio (LTV) was often kept lower to reduce the lender's risk.

For more information or to go over your own scenario, please contact mc at 408-393-2068

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