What should be my interest rate?

I am buying a $500,000 home with 5 % down and a credit score of 740+. I will go with a no doc loan because I am in sales and it is difficult for me to demonstrate a steady income. What rate should I expect ot pay.

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  • Anonymous
    1 decade ago
    Favorite Answer

    I've been out of the business too long to quote a specific rate, but I can tell you right off the bat, you have a few things working against you which will cause the rate to be higher:

    1. To begin with, rates are always higher with on no-doc loans.

    2. You are only putting 5% down. Most lenders will require 10% (if not more) on a no-doc loan. 5% will definitely bump up your rate even more.

    3. If you're doing straight 95% financing with one mortgage, this will put you into "jumbo loan" pricing and the rate will be higher.

    Also, when quoting rates, lenders will always need to know if this is a primary residence, vacation home, or an investment property. Also, how many units? As you say it's a no-doc with 5% down, I'm guess it's for a 1 unit primary residence.

    Lastly, when you say "no doc", you need to provide some clarification. The term "no doc" has become muddied down and is now an umbrella term for many types of "limited verification" loans.

    For example, here are a few loans which often get lumped into the no-doc category, but really are "low doc" loans:

    1. Stated Income = Income stated on the application, but not verified. Employment, assets, credit verified.

    2. No Ratio = Income not listed and not verified. Assets, credit, & employment verified.

    3. NINA = No Income, No Assets verified. Only credit and employment verified.

    **A true No-Doc loan verifies only your credit. Income, assets, employment are not verified.

    Hope that helped, and good luck...

    Source(s): I'm a Realtor and formerly a loan officer.
  • We now have so many programs for people in your situation. With that score you can go on a conforming stated income/stated asset loan where you can get the same rate as someone that went full doc and verified income. No Doc is the wrong term for you, that is if you have no employment, income or assets to verify. There are even programs now where you can show your 1099 and use that income without tax returns, there are programs where you take your last 6 or 12 months bank statements, add up the deposits ONLY, and that is your income! These are ways to get a better rate than just going stated income. But as for no doc, that is not up your alley.

    How long do you want to keep this home for?

    95% can be done as one loan 95% with or without PMI or an 80/15 where you split up the two loans and have a lower rate on the first. You should speak with someone highly educated before you do anything because you will hear a bunch of random answers from random people and you have to first EDUCATE yourself and then make the decision.

    In the meantime, I just priced out a 95% stated income/stated asset loan at loan amount of $475k and the rate would be in the mid 6% range. Go for interest only if you are payment conscious but also check the prepayment penalties, if there are any, and how it works into your future plan. I would definitely talk to a mortgage broker on this one as most banks do not offer 95% stated income loans. They will refer you to a mortgage broker, that’s where I get most of my business. www.ScottLushing.com

    Source(s): ME: www.ScottLushing.com I live and work in South Florida and mortgages are my life
  • Anonymous
    1 decade ago

    Can't say here. Shop around and don't take the first deal. For buyer info go to www.jackosullivan.net

    Source(s): An Agent
  • Anonymous
    1 decade ago

    What kind of program? 5 yr ARM, fixed, etc...?

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