Need a reduced documentation mortgage? We're the experts.

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If you do not derive your income from a paycheck or you do not desire to disclose all of your personal financial information to a lender, you can still obtain a mortgage, but this does not necessarily mean that you need to pay more.

Homebuyers that work for an employer and receive a regular paycheck are usually willing to divulge details of their finances in exchange for the best mortgage terms available. Many buyers, however, do not have a steady steam of income; they may own their own business, work on a commission basis, live off investments, receive unreported income in cash, etc. And others, simply, treasure their financial privacy. For these borrowers, "limited documentation" mortgages are best.

They are called "limited doc" or "low doc" mortgages because they describe the amount of documentation required by the lender. Some low doc  mortgages still require the borrower to provide quite a bit of paperwork. A "no-doc” mortgage requires at least a credit report and an appraisal.

Borrowers pay for the flexibility and privacy of these types of mortgages through tradeoffs. By not having to provide full disclosure, borrowers are willing to accept shorter-term rate guarantees and sometimes prepayment penalties, as well as higher down payment requirements. Everything depends on the borrower's credit, their flexibility and goals. Unlike traditional loans, one size does not fit all.

Your Privacy

Before applying for a mortgage, it is critical to consider all options, which our loan professionals at Colorado Western Mortgage Corporation specialize in. We can help you make the various mortgages available fit your situation rather that requiring you to accept undesirable rates and loan terms.


There are several types of low doc/no doc mortgages to consider:

Stated Income Loans

Someone who gets a stated income mortgage must "state" their monthly income. Instead of backing up the income statement with pay stubs and IRS W-2 forms, the borrower may have to provide 2 to 24-months of bank statements and/or a CPA letter or business license.

Lenders will generally evaluate the borrower on the basis of what is called the front and back ratio. The front ratio is the borrower's mortgage payment on their residence. The back-end ratio includes their housing expense along with all of the borrower's other monthly debts (credit cards, car loans or leases, student loans) versus borrower's gross monthly income.

The interest rate on a stated income mortgage may be above the comparable rate for a conventional "full doc" mortgage with all things being equal. There are many factors that affect a borrower's interest rate, namely: income stability, front and back debt-to-income ratios, FICO score, the down payment and the appraisal.

No Ratio Mortgages

In this case the borrower does not disclose income; pay stubs, W-2s, or tax returns are NOT required.

No-ratio mortgages are called as such because the lender does not compute the debt-to-income ratio. Although the borrower's debts are listed on the credit report, the lender is only interested in whether they were paid in a timely manner. The borrower, however, lists assets such as cash in banks, CDs, stocks, bonds, cash value in life insurance policies, equity in businesses, real estate, retirement plans, autos, etc.

The no ratio program provides expedited processing for creditworthy borrowers. A no ratio mortgage would be ideal for a sophisticated borrower because a "full doc" conventional loan would require that the borrower submit personal and corporate tax returns, a year-to-date profit-and-loss, and balance sheet for all businesses owned.

This type of loan is also conducive to someone undergoing big life change, such as a divorce, death of a spouse, a career switch or retirement, all of which could reduce their earning ability until they get back on track making money again.

No Income - No Asset Verification Mortgages-NO-DOC loans

These loans, also called NINAs, require the least amount of documentation. The borrower provides his/her name, Social Security number, the amount of the down payment and the address of the property being bought. The lender obtains a credit report, property title report and an appraisal. The borrower's credit score is the key. The better the score, the less documentation required. Often, the lender will want to know what the buyer does for a living, and for how long.

These mortgages are best for people who never, ever fail to pay bills on time. They are meant for people who zealously guard their privacy. The less documentation, however, may mean either a higher rate or other tradeoffs in loan to value.

Mortgage lending is all about "layers of risk:" 1) the size of the down payment; 2) credit score, 3) willingness to show ownership of assets, and 4) the degree of disclosure regarding how the borrower earns income.

The professional at Colorado Western Mortgage Corporation are experts in tailor a loan program to fit your needs. To get started fill out our "Quick Application" or "Contact Us" or call us immediately at 303-786-7575 or 1-800-DENVER, CO today.

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