What is a NINA Loan?
With all the different types of home loans out there, the terms can get convoluted. For self-employed people especially, the "specialty" loans that allow for different kinds of income verification can all seem to blend together if you don't know the specific details of each. One such loan type is known as "no income, no asset" (NINA) loans. These loans are akin to stated income mortgages, in that they don't require the applicant to provide pay stubs, proof of assets, or tax returns. Now, depending on the lender, they will still have some pretty strict requirements, ranging from bank statements to payment histories, as well as verification of employment. There are also likely to be steep requirements for credit score (above 720) and a large down payment. As we've mentioned in the past, these mortgages for self-employed or nontraditionally employed people can pose significant risk for lenders. Since they aren't verifying income (or it's difficult to verify), they require some kind assurance that you'll be able to repay your loan - which is where strict credit score requirements, large down payments, and sometimes high fees or interest rates come into play. These types of loans are still available for some, with some of the stipulations mentioned above, but after the housing crisis and market crash, such loans are less and less common. Unfortunately, lenders were approving these types of loans with little or no documentation, selling off the debt or bundling it with other loans, and the eventual results of failed repayment were catastrophic. The good news, however, is that with a fair amount of risk mitigation, NINA and other no-doc loans are still available for those who truly need them - it just isn't the free for all it once was. If you work for yourself, or in a nontraditionally/mostly cash business, a NINA loan might the best option for you - or at least something similar. As always, it pays to take your time finding a mortgage. Take the steps to improve your credit score and save for your down payment, and shop around to find the lender that is going to work within your needs. If you don't have much in the way of income documentation, your options will be limited, but securing a home loan doesn't have to be impossible. You may have additional hoops to jump through, but with some patience and diligence, you can find a lender willing to approve you for a NINA or other similar home loan - just be sure you can afford to pay it back!