Question:

What are no-asset loans for?

Answer:

No-asset loans allow high credit borrowers to obtain even 100% financing without providing any factual documentation of assets (and income). Since no-asset loans are quite risky to lenders, borrowers asking for no-asset validation loans will obtain higher rates. No asset loans are a part of the family of reduced documentation mortgage loans and often will be advertised as "no income/no asset" loans, or NINA loans.

Benefits of No-Asset Loans

No-asset loans are limited documentation mortgages and no asset verification is required. Income is usually stated and has to be consistent with your ability to repay the loan.

An obvious benefit of the no-asset loan is that your DTI (debt to income) ratio does not matter as long as the income you state is sufficient to repay the mortgage and satisfies DTI requirements. As long as your credit is high (which shows high responsibility in managing your finances), lenders could qualify you for 100% financing, if necessary. A cash-out with a no-asset loan would have some restrictions.

If you want to reduce your rates and your situation allows asset verification, you may have to disclose certain assets.

No asset verification loans also allow purchasing or refinance of multi unit and investment properties, or a second home but the rates will be slightly higher and the LTV will usually be lower.

Mortgage rates hit their lowest since 1955. Ask the home loan experts we recommend Quicken Loans how to take advantage of them.
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