No Doc Loans are not Sub Prime Financing

Or you may know them as Stated Income, No Income Qualifiers, NINA, and SIVA or, well you get the point. These products were initially designed for the self employed business owner, who for a variety of reasons may not be able, or desire to evidence their income to qualify for a traditional mortgage in order to buy real estate.

The designers of this niche mortgage product came up with other underwriting guidelines to compensate for the lack of verifying the applicant's income. These guidelines included superior credit a sufficient down payment and some form of remaining liquid assets in reserve. Over the years however these products have become more lenient in some regard and they are being confused with sub prime mortgages. When in fact sub prime has more to do with credit than income.

The interesting thing is that these so called "No doc loans" underwritten with superior credit, equity and reserves as originally designed perform as well as a standard conforming loan, not as sub prime. In fact as many 35% of all loans these days may have some form of a no doc element to them, yet the foreclosure rate for these mortgages is under 2% even in today's troubled times.

These mortgage products are readily available in their original form although the true sub prime loans have undergone serious scrutiny and more restrictive guidelines in some cases disappeared altogether. For more information regarding mortgage products you can visit our affiliate Choice Mortgage at http://www.choicemortgage.us/ or contact 480-905-1900 to speak with a loan professional.

You can always count on Choice Group Realty to help you with finding homes for sale in Phoenix Metro area.