mortgage loan, very good credit but no income verification proof?
looking to get home loan, my relative has both excellent credit score of 790 and has income of about $ 2100 monthly and my relative has documents like pay checks and tax return documents to prove his income. I myself too have very good credit score of 756 and I do a self job and can't prove my income as I don't have any documentations to prove income.
Will that be a problem to us for getting approved for a loan amount of about $250k?
I am going to file tax return very soon so I can prove my imcome to home loan lender.
Will we both be subject to income verification despite the very good credit score?
What do we need for approval process? documentations?
- Anonymous1 decade agoFavorite Answer
Lenders will typically loan you about 3.5 times your gross annual income. You can use previous years' income tax forms as proof of income. Another way of looking at that is that your total mortgage payment PITI (principle, interest, taxes, and insurance) should not exceed approximately 40% of your gross monthly income IF you have no other debt (car payments or revolving credit card balances).
- Expert8675309Lv 71 decade ago
You need TWO YEARS worth of tax returns to prove you rincome, and keep in mind, a bank won't accept them until they have been processed by the IRS, because they will order a transcript called a 4506t form, that is a report that will verify the figures that you turn into the bank...that is how they catch fake tax returns.
You can't go stated income/self employed, because that requires not only evidence of a business license for the last two years, but a letter from a CPA stating that they have filed your taxes for the last two years under the name of your business. These are NOT the same as "no doc" loans...stated income is stated income, not stated JOB.
True, no doc loans, where you didn't have to give the name of an employer OR show your income, are gone.
If you cannot provide one or the other, you are out of luck.
- 1 decade ago
You may be able to do a "no doc loan" This is were they don't verify income, they only look at credit. Talk to your bank or broker, they will be able to tell you what you would qualify for. The income of your relative is way too low for a 250k loan. Good luck!