Spring Break
The many flavors of mortgage loans
Jessica White/DC Columnist
Issue date: 4/8/07 Section: Business
- < prev Page 2 of 2
Look at this type of loan as a fudge swirl. It is a little more exciting than vanilla, and a little more risky. Maybe you will like it, maybe you won't. In ice cream terms, a fudge swirl has more calories (and in loan terms a higher interest rate), is not as well-loved as vanilla, and maybe does not suit everyone's palate.
No-income loans take it a step further - borrowers are not required to even "state" an income. Qualified borrowers can take it a step further and do a "no income, no asset" loan, meaning exactly that - there is no income and no asset information on the application. This option is only available to borrowers with flawless credit and can require around a thirty percent down payment.
I would consider this the gourmet chocolate ice cream with large chocolate chunks - it is for those who can really afford the calories and want a rich, decadent ice cream.
People in this category just want to be left alone to enjoy their ice cream - they do not want anyone bugging them about calories or telling them they should not eat it. Nor do they want anyone bothering them for documentation. They have flawless credit and a sizable down payment. And they are willing to pay a higher interest rate (or consume more calories) than the folks who just chose vanilla.
And FYI: a lender cannot tell a borrower that s/he has to "state" his or her income and tell the borrower what that income should be to qualify for the loan. The borrower has to tell the lender s/he wants to do a stated income loan, and the borrower has to state his or her income. Anything else is fraud.
And now that I have answered your question, I think I have some cookies & cream in the freezer!
Jessica White, also known as "Ms. Mortgage Maven," is a mortgage lender for a national bank in Fort Washington, MD. Call her with your questions 202-607-4449 or email her at Jessica@msmortgagemaven.com and you may get your question answered in this column. You can also apply online at www.msmortgagemaven.com.
No-income loans take it a step further - borrowers are not required to even "state" an income. Qualified borrowers can take it a step further and do a "no income, no asset" loan, meaning exactly that - there is no income and no asset information on the application. This option is only available to borrowers with flawless credit and can require around a thirty percent down payment.
I would consider this the gourmet chocolate ice cream with large chocolate chunks - it is for those who can really afford the calories and want a rich, decadent ice cream.
People in this category just want to be left alone to enjoy their ice cream - they do not want anyone bugging them about calories or telling them they should not eat it. Nor do they want anyone bothering them for documentation. They have flawless credit and a sizable down payment. And they are willing to pay a higher interest rate (or consume more calories) than the folks who just chose vanilla.
And FYI: a lender cannot tell a borrower that s/he has to "state" his or her income and tell the borrower what that income should be to qualify for the loan. The borrower has to tell the lender s/he wants to do a stated income loan, and the borrower has to state his or her income. Anything else is fraud.
And now that I have answered your question, I think I have some cookies & cream in the freezer!
Jessica White, also known as "Ms. Mortgage Maven," is a mortgage lender for a national bank in Fort Washington, MD. Call her with your questions 202-607-4449 or email her at Jessica@msmortgagemaven.com and you may get your question answered in this column. You can also apply online at www.msmortgagemaven.com.
Be the first to comment on this story