Can I Get A Mortgage Without Tax Returns?
If you're looking for a home loan, but haven't filed tax returns in the last couple of years, you may be running into some difficulty finding a standard mortgage. Fortunately, the rise of non-traditional employment and agile lending companies make it more possible than ever to find a mortgage without having to present your tax returns. These types of no tax return mortgages will typically be non-QM, that is, not a Qualified Mortgage backed by government institutions. These types of loans, however, are safer than ever - thanks to regulations put in place after the crisis of 2008, and continuing to be revised today.
Such mortgages, however, come with some hurdles to jump. Because you aren't presenting tax returns, you'll have to verify your income in some way - bank statements, profit and loss statements from a business, even pay stubs (depending on the lender) - but that's just the beginning.
It's important to understand that providing loans to would-be homebuyers is inherently risky for a financial institution. It becomes riskier as lenders move away from QM loans, offer alternative products, require less documentation, and so on. So, with this in mind, the process of securing a mortgage without tax returns will often have other, more stringent requirements - simply because it helps the lender reduce their overall risk. That means that no tax return mortgages often require a credit score off at least 500 (maybe higher for some lenders). Even with a great credit score, you may be looking at a down payment of 10% of the total price, or even higher if your credit score isn't great. Because you won't be providing tax returns, you'll likely need 12 to 24-months worth of bank statements, as well as a debt-to-income ratio (DTI) of up to 50%. If you are self-employed, you will also need proof of operating your business, most likely documentation showing two years of operation. These may all seem like challenges, but if you need a mortgage without providing your tax returns, this path may be the best option. Because no two lenders are the same, you can shop around to find the terms that best fit your situation. Minimum loan amounts will also vary by lender, so if you're looking for a bank statement mortgage, you should explore your options and gather as much information as possible.
It may require a few extra steps, but no tax return mortgages are available! Take the time to get your credit in order, save for a down payment, and explore your options to find the bank statement loan that's just right for you!