When evaluating mortgage options, the level of income and asset documentation required varies significantly by loan type. Here is a concise breakdown:
Full Documentation (Full Doc)
Borrowers provide complete verification of income and assets. This typically includes recent pay stubs, W-2s or tax returns (usually two years), bank statements, and documentation supporting any additional income sources. Assets for down payment, reserves, and closing costs must be fully verified.
Stated Income / Verified Assets
Income is declared but not independently verified through tax returns or W-2s. However, assets such as bank accounts and reserves are fully documented to confirm the borrower’s ability to close and maintain liquidity.
Stated Income / Stated Assets
Both income and assets are declared by the borrower without traditional verification. Lenders rely more heavily on credit profile, property value, and risk-based pricing.
No Ratio
Income is not used to calculate a debt-to-income ratio. Employment may be confirmed, but income amounts are not evaluated for qualification.
No Income / Stated or No Asset Verification
Income is not documented. Assets may be stated or sometimes not verified, depending on program guidelines.
No Income / No Assets (NINA)
Neither income nor assets are documented. Approval is primarily based on credit, property value, and loan structure.
Each step down in documentation typically increases interest rate and required equity due to higher lender risk.