subject: No Income Mortgages - Good or Bad? [print this page] No Income Mortgages - Good or Bad? No Income Mortgages - Good or Bad?
Have you thought about getting a no income mortgage? Are you wondering if this type of mortgage is good or if they are bad for you? Every situation is different so here are a few situations where a no income loan is good and a few where they are bad.
Good Situation #1
If you are self employed and have trouble proving your true income, then a no income mortgage is a good idea for you. You will have to have good credit in order to get a no income mortgage, but as long as you know you make enough to afford it, then if you are self employed and have trouble proving your real income, then this type of loan is for you.
Good Situation #2
Servers, Bartenders, and other tipped employees can benefit greatly from a mortgage like this. Tipped employees typically do not claim all of their income and it is hard to prove what they actually make so a no income mortgage can really benefit them. As long as you can afford the mortgage and you know you make enough, then you as a tipped employee can benefit from a no income mortgage.
Bad Situation #1
If you have worked at the same job for over 2 years and you get paid a regular paycheck, then stick with a conventional mortgage because this type of loan is a bad idea for you. This is a situation that you should be able to qualify for a conventional mortgage with a lower rate so there is no need for a mortgage without proving your income
Bad Situation #2
If you make a good amount of money, but your debt to income ratio is too high. Don't let a mortgage broker try to talk you into a no income mortgage if this is your situation because you will end up ruining your credit and going into more debt. If your debt to income ratio is too high, then you should not be trying to refinance your mortgage anyway.
So now you know which situations a no income mortgage will fit and which they won't. No income mortgages are not for everybody and you should not get stuck with one because your mortgage broker recommends one. You need to know that your situation fits what a no income mortgage is made for.
