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This mortgage calculator can be used to figure out monthly payments of a home mortgage loan, based on the home's sale price, the term of the loan desired, buyer's down payment percentage, and the loan's interest rate. This calculator factors in PMI (Private Mortgage Insurance) for loans where less than 20% is put as a down payment. Also taken into consideration are the town property taxes, and their effect on the total monthly mortgage payment.
The number of Stated Income and No Documentation loans (No Doc)
have increased dramatically in the past few years. In some areas
of the country, such as Washington D.C. or New York City, 75% of
mortgage company loans are Stated Income or No Doc loans. This
is because property values are so high, people could not qualify
just on their verifiable income. Consider this. A townhouse in
Washington D.C. may cost $700,000. How many individuals can
afford that on salary alone? Other sources of income must be
taken into consideration such as: retirement funds, stocks,
bonds, bank statements, liquid assets, and more. The increase in
the number of self-employed individuals, or people who combine
jobs and self-employment is also on the rise. The result has
been a strong infusion of Stated Income and No Doc loans into
the mortgage industry.
Common Scenarios for Stated Income or No Doc Loans Self-employed
individuals are the obvious contenders for Stated Income and No
Doc loans. Often, self-employed individuals write off expenses
and claim as little as possible in net income. In fact, their
income is larger than it appears on their tax statement. In
addition, anyone with a unique income, employment, or asset
situation may want to apply for this type of loan. For example,
people who live on tips, are paid commission, or have other
forms of compensation at their jobs will want to apply for this
type of loan. Also, individuals who have recently changed jobs,
within the last 12 months, may need this type of loan.
Stated Income Loans Though they are often referred to in the
same breath, Stated Income loans are different than No Doc
loans. Stated income means you have a job which can be verified.
For example, you draw W-2 income from a source outside of
self-employment, or, your self-employment situation is easily
verified through bank statements or other documentation.
No Doc Loans These types of loans do not require documentation
of employment or assets. All that a lender needs is your name,
social security number, address, and credit report. The loan is
granted based on a solid credit history and a high credit score.
Another option for this type of mortgage is a No Income No
Assets (NINA) mortgage. Applicants are not required to write
down or document income or assets for a NINA. The applicant
simply states where he or she is employed and where he or she
banks. Because no documentation is required, the interest rates
are higher.
Credit Scores Stated Income and No Doc loans require less
documentation from the lender. Therefore, credit scores must be
high in order to obtain one. Basically, a high credit score is a
lender’s guarantee that the loan will be repaid. If credit
scores are not high, the borrower may still obtain a loan, with
a down payment and/or pay a higher interest rate.
Interest Rates One general rule of thumb for Stated Income loans
is the less documentation you provide, the higher the interest
rate. Basically, the more income and assets a buyer can prove,
the better. Acceptable documentation for some lenders includes
checking and savings account statements, retirement funds,
stocks, bonds, and mutual funds. In some cases lenders will even
accept deposits to accounts over the last 12-24 months and
average them out as evidence of monthly income. In the latter
case, this is a fully documented loan and an applicant may
obtain a better interest rate.
Down Payment on Stated Income and No Doc Loans Keep in mind the
lender is trying to minimize risk with these loans, so a higher
down payment of say 5-10% is often essential for a lower
interest rate. If you have a solid credit history, you can still
obtain a loan without a down payment, the borrower merely pays a
higher interest rate then the lowest going rate.
My company, Breakwater Mortgage in Virginia Beach
(http://www.breakwatermortgage.com), offers Stated Income and No
Doc loan products. Many banks, and some mortgage companies do
not. If you are the type of individual who needs these mortgage
products, ask your prospective lender if they handle these
loans. If not, call me at 1-877-45 BREAK and I will be happy to
assist you. Currently Breakwater Mortgage writes mortgages in
Virginia and North Carolina.
Stated Income and No Doc loans are the perfect loan programs for
small business owners, self-employed persons, or any other
individuals who cannot prove in writing all of the income or
assets necessary to purchase the home of their dreams.
About the author:
Kevin Onizuk has been in the mortgage business since 1994 and
co-founded Breakwater Mortgage in 2003. His background covers
many aspects of lending including mortgages, home mortgages,
mobile homes, car loans and personal loans. Breakwater’s mission
is to provide the highest level of service in the mortgage
industry.