Canadian Mortgage, Insurance and Financial Glossary
|Synonyms:||no doc loan, no doc mortgage, no-documentation mortgage|
|Filed Under:||financial-banking, legal-contracts, mortgages|
|Tags:||banking, contract, legal, mortgage|
Definition of no-documentation loan
- no-documentation loan
- 1. A loan that does not require the applicant to provide much personal information. The applicant usually provides their name, address, Social Insurance Number (to pull credit reports), and contact information for an employer, if applicable. The underwriter simply approves or denies the loan based on the applicant's credit history, the appraised value of the property, and the amount of down payment. A large down payment is usually required for this type of loan. Also known as a "No-Doc Loan."
Related Terms and Acronyms:
- creative financing An innovative or unusual way of structuring a home loan that allows the buyer to buy the house.
- low-documentation loan A mortgage that requires less income or asset verification than conventional loans. Low-documentation loans are designed for the entrepreneur or self-employed, for recent immigrants, or for borrowers who cannot or choose not to reveal their financial information. A substantial down payment and excellent credit history are generally required. This type of loan will also yield a higher interest rate.
- no credit history To have no record of an individual's credit worthiness.
- private lender A lender not associated with a traditional lender.
- verification of employment (VOE) Confirmation that a loan applicant is telling the truth about where he or she works and how much he or she makes.