“No job” mortgages

Back when I bought my first house (for $27,000), the mortgage business was a local business done by local banks, all of which used their own set of criteria for deciding whether or not to lend you money. Then mortgages went national, and for many years most mortgages have been forced to conform to the standards of the wholesale mortgage market so that the original lender could sell them, whether or not they did. I had a mortgage that was sold to four different banks in four years!

The problem with this is that these mortgages have rigid requirements as to income and outstanding obligations, and if you do not qualify you are shut out.

The only way around this is to find a bank willing to write what are now called “portfolio loans.” These banks will use their own criteria to decide whether or not to make you a loan.

Responding to market demand, more banks are getting into this business. One we just came across has a web site called http://nojobmortgage.com.

Here is what they say about how they make their decision as to whether or not to loan you money:

“…..we created a series of truly revolutionary mortgage programs that require NO Employment, NO Income and NO Asset documentation whatsoever! It’s true – on these sections of the loan application, we leave them ALL BLANK! And yet we still offer great rates, low fees and flexible terms.

“How did we do it? Simple. We accepted that consumers all have one thing in common – a Credit Score and Credit History. Then we designed a complex algorithm that allows us to determine, based SOLELY ON CREDIT SCORE and CREDIT HISTORY, whether a particular client stands a good chance of repaying a home loan. And if our program says you meet our Risk Guidelines, a quality, low-rate home loan offer is made to you!”

This kind of mortgage can be useful if you are retired and want to take equity out of your house. But make sure you compare the fees and interest rate (which is higher than you would get with converntional mortgage) to reverse mortgages, which are readily available, and whose primary drawback is high front-end fees.

For more Mortgage information click here.

Comments are closed.