Qualifying for your home loan does not always mean bringing in your pay stubs and bank statements to verify how much you can afford. Many other factors are considered which enable potential borrowers to qualify with different types of documentation. Hopefully you read last months article because your credit scores are going to determine how many documentation options will be available. Some potential borrowers qualify for their home loan without employment, income, or money in the bank. Sound a little fishy? This article is going to outline the five most common types of documentation for acquiring your home loan.

Verified Income, Assets, and Employment This is your traditional loan, often referred to as "Full Documentation". The borrower will generally have to provide pay stubs and/or tax returns to support their income. Anywhere from one to three months bank statements will be used to verify down payment or reserve requirements. Employment will be documented by a verbal phone call or a full written verification of employment provided from the employer. This type of documentation can be troublesome for the borrower who does not hold onto their financial records.

Stated Income / Verified Assets Many self-employed borrowers make a good living, however their taxes tell another story. Most self-employed people try to write off anything and everything on their taxes, leaving their adjusted gross income way below their actual income. With the stated income documentation, the borrower gets to state how much they make without verifying it. For example: A client of mine is a local contractor. Using his taxes his income is $2500 a month, but for his loan we are going to state his actual income of $8000 a month. This stated income is accepted by the lender and there is no documentation (pay stubs, W2's, or taxes) required to support the $8000 a month. The assets must be verified by at least two months statements showing enough for down payment and reserves. Wage earners also use stated income documentation in order to qualify for home loans.

Stated Income / Stated Assets This class of documentation is similar to the one above however the assets are stated as well. No verification of your income and no verification of your down payment or reserves. In order to qualify for such a loan you simply need to have continuous employment in the same line of work for two years and a decent credit score. For a lot of lenders all it takes is a 640 middle credit score and you will be qualified for 100% financing (yes, no money down) using stated income/stated assets documentation.

No Income / No Assets Almost identical to stated income / stated assets, but instead of stating the income and assets there are left blank on the loan application. Again all you need is employment and a credit score to qualify for this type of documentation. The reason some borrowers choose this option is because in order to qualify for their loan they would have to state income and assets that are unreasonable. For example: I have a client who has $100,000 dollars from an unverifiable source and wants to buy a $350,000 home. He works as a bank teller and makes $2,500 a month. Well, I am not going to state his income at $7,500 a month and his assets at $100,000 in order to qualify, that would be considered unreasonable. This client needs to use no income / no assets documentation in order to qualify for his home loan. Now the lender will not worry about how much money he makes or where the down payment is coming from.

No Documentation This documentation is the opposite of full documentation. No employment, income, or assets are required. In fact, they are required to be left blank on the loan application. Your name and a credit score are the only two things required to qualify for your home loan. We now have lenders doing 100% financing with no documentation down to a 680 credit score.

There are a couple other types of home loan documentation, but these five are the most common. In some cases the borrower will get the exact same interest rate going full documentation or no documentation. However, most borrowers will get a slightly higher interest rate when needing to qualify with less documentation. Regardless, take advantage of the different home loan documentation types when acquiring your next mortgage. So many potential home owners don't even bother to try getting a loan because they lack a certain income or haven't had employment for two years. Don't let these factors discourage you, chance are there is a loan program for you.