No-Income Verification Mortgage: Do They Exist and What Are Your Options?


February 23, 2023

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You may have heard of a No-Income Verification Mortgage, and it’s understandable that many home buyers would be curious about them. After all, if you don’t have to verify your income in order to get a mortgage, that could make the process a lot simpler. But do these types of loans actually exist? And if so, what are your options? Let’s take a look!

What is a No-Income Verification Mortgage?

A no-income verification mortgage, also known as a stated-income mortgage, is a type of loan where the borrower does not have to provide traditional proof of income, such as pay stubs or tax returns. Instead, the borrower simply states their income on the mortgage application, and the lender takes them at their word.

While these types of mortgages were more common before the 2008 financial crisis, they still exist today. However, they are much harder to get than they used to be. There are several reasons for this:

  • Stricter lending standards: In the aftermath of the financial crisis, lenders have become much more cautious about who they lend to. They now require much more documentation and verification of income before approving a loan.
  • Higher risk: No-income verification mortgages are considered higher risk because the borrower’s income has not been independently verified. This means that lenders are less likely to offer them, and those that do may charge higher interest rates or require larger down payments.
  • Limited availability: No-income verification mortgages are not widely offered by lenders, so borrowers may have a harder time finding a lender who is willing to offer them this type of loan.

Overall, while it may still be possible to get a no-income verification mortgage, it is likely to be much harder than it was in the past, and borrowers may need to shop around to find a lender who is willing to offer them this type of loan. Additionally, borrowers should be aware that no-income verification mortgages may come with higher interest rates or other fees, so they should carefully consider whether this type of loan is right for their financial situation.

How Does a No-Income Verification Mortgage Work and What are the Requirements to Qualify for One?

Navigating the mortgage market is a bit daunting at times but a no-income verification mortgage can make borrowing simpler. Qualifying for one is easily done; mortgage providers only need to verify basic information such as your credit score, employment status, and mortgage details so they can ascertain how much money you’re eligible to borrow.

You still need to provide some paperwork. This could be bank statements and other bank account details, tax returns, alternative income sources like rental income or government benefits, for example, or other verified assets. Basically, you are showing you have the funds to support the monthly payment but you can’t necessarily prove employment or you lack the proof of income required for the traditional mortgage application process to get loan approval.

The trickier part might be finding a lender who’s willing to agree to one. It’s important to note that this option isn’t offered by every financial institution out there. This is when it’s a good idea to contact a reputable mortgage specialist, as they are often well-connected and can put you in touch with the right lender for you.

meeting with paperwork

What are the Advantages?

The major advantage of a no-income verification mortgage is fairly obvious – if you have an irregular or unsteady income, this type of mortgage can open up new home-buying options for you, or at the very least make the process of getting a mortgage much easier.

An Easier Process

Moreover, the fact that lenders don’t need to look at your proof of income, employment verification, or assets can streamline the process and make the whole experience smoother for you. This also means that you could be approved for a loan faster than if you were applying for one with traditional methods.

More Lender Options

Finally, these types of mortgages are usually available from different types of lenders, which can sometimes offer more competitive loan terms compared to the conventional mortgage market. 

What are the Disadvantages?

The key disadvantage of this loan type is the interest rate you receive will likely be higher than other mortgage products, meaning your monthly payments could be more expensive. It’s a bit of a risk for the lender, as they don’t have access to verifying your annual stated income. As such, these lenders may charge a higher interest rate in order to account for this perceived risk. This can mean that initially, you would be subject to high interest rates due to being deemed a high-risk borrower.

Possible Lower Amounts

Additionally, since the lender has less information to go off of when assessing you for eligibility, they may not be able to offer you as much money as they would with a traditional loan where income is verified. 

A Larger Down Payment

You may find that you’ll also have to put down a larger down payment,  as this is essentially the lender’s way of protecting themselves. In some cases, you may have to put down as much as 35%.

credit score

Check Your Credit Score

Finally, you’ll have to make sure your credit score is as good as it can possibly be.  As mentioned earlier, most lenders will still need to do a credit check in order to get loan approval. Having a good credit score can significantly improve your chances to get a loan even without traditional income. If you don’t have a good credit score, then chances are you won’t qualify for this type of mortgage.

Are There Any Other Options for People Who Can’t Verify Their Income?

If you’re unable to get approved for a no-income verification mortgage, there are still other options available. Some lenders may offer mortgages that don’t require verification of income but do require documents like pay stubs, tax returns, and bank statements. Additionally, some lenders have special programs for self-employed individuals or those with irregular incomes, so it’s worth looking into these options as well. 

Finally, if you can’t find a lender that offers a no-income verification mortgage, there are still other loans available such as a personal loan or a bad-credit mortgage. Be aware that these will probably also require higher monthly payments.

No matter what type of loan you’re looking for, it’s always best to speak with a qualified mortgage broker to find the right loan for your individual needs. With their help, you can navigate the complex world of mortgages and find one that works best for you

How to Find the Right Lender for You

Finding the right lender to get a loan can be a challenge. It’s important to research and compare lenders; along with comparing their rates and terms in order to find the best deal. You should also consider working with a reputable mortgage broker who can help you navigate the lending process and find the right loan for your needs.  

It’s also wise to be aware of any potential pitfalls or red flags while shopping around. Be sure to read through all the documents and ask questions if you don’t fully understand something, as there may be hidden fees or prepayment penalties you should watch out for. Ultimately, with the right lender by your side, you can find the perfect loan to help make your home-buying dreams a reality.  

A no-income verification mortgage is a great way for individuals to purchase the home of their dreams with limited paperwork or irregular incomes. As with all big financial decisions, it’s important to research the different lenders and find the right one for you. With a bit of due diligence, you can be sure to get the best deal possible.

If you’re still unsure about your options, at Sterling Homes we have all the expertise and experience to help you get started with buying a home, so feel free to contact us today and see what we can do to help you!

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About the Author:


At Sterling Homes, our mission is to provide the opportunity for affordable homeownership without compromise. Over the last 70 years, Sterling Edmonton has quickly become one of Edmonton’s most popular builders. We bring more than seven decades worth of exceptional customer service, superior design and unparalleled craftsmanship to the greater Edmonton area. As a member of the Qualico Group, Sterling Homes focuses on greater Edmonton’s finest family communities, while being able to offer some of the region’s most family friendly prices thanks to volume purchasing power for materials, trades and land. This has not only made Sterling one of Edmonton’s bestselling, move-up builders, but also one of the industry’s most respected home providers. It is through our uncompromising commitment to our customers that we proudly deliver the Sterling Advantage – that’s why each and every home we build includes a 10-year home warranty, a completion guarantee and new home warranty excellence rating. Our Advantage is our pledge that, when you build your dream home with Sterling, we will deliver a timely, well-built home you’re sure to enjoy for years to come.

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