How to Get Mortgage Without Tax Returns? [2023]

Video how to get a home loan without tax returns

Are you struggling to get a mortgage because you lack traditional documents like tax returns? Don’t worry; there’s a solution for you! No tax return mortgages offer a way for individuals to secure a home loan.

Lenders in this space use alternative methods to assess creditworthiness. This article explores the benefits, eligibility criteria, and application process of Mortgage Without Tax Returns, providing a path to homeownership for those without traditional income verification documents.

Let us dive right in!

Why Do Mortgage Lenders Require Tax Returns?

Purchasing a home is a huge investment. Most lenders require tax returns and other traditional documents because they provide a full overview of your financial situation. This gives them insight into your income, debts, and other obligations. With this information in hand, lenders can get a better understanding of whether you can afford the mortgage loan or not.

However, new ways have emerged to determine the borrower’s creditworthiness that does not include traditional documents like tax returns, pay stubs, W-2 forms, etc. This article will provide detailed insights into no-tax return mortgages.

Can You Get a Mortgage Without Providing Tax Returns?

Yes! You can easily get mortgages that do not require tax returns. Some lenders provide Tax Return Mortgages and offer flexibility to borrowers who do not have traditional documents like tax returns, pay stubs, etc., to verify their income and seek mortgages conventionally.

However, these lenders establish borrowers’ creditworthiness through alternate ways, like reviewing their bank statements and asset documents, ensuring they have enough cash reserves through 1099 forms, etc.

Lenders might suggest some additional documents to make up for the lack of traditional documents. Borrowers must also meet certain criteria mentioned below to be eligible for a No Tax Return Mortgage.

Let us start by understanding No Tax Return Mortgage!

Understanding No-Tax Return Mortgages

  • No tax return mortgages are a type of mortgage loan that doesn’t require borrowers to provide their tax returns as part of the application process.
  • They are best suited for self-employed borrowers, commission-based earners, seasonal workers, and real estate investors who may have difficulty meeting traditional income verification requirements.
  • These mortgages can also be advantageous for people with low gross income or low reported income on tax returns due to tax write-offs.
  • For this type of loan, lenders establish creditworthiness through alternative ways. They ask for 12-24 bank statements, asset documents, cash reserves, 1099 forms, or any additional non-traditional document they deem fit for the process.
  • It’s important to note that no-tax return mortgages may come with higher interest rates or require a larger down payment to compensate for the increased risk to the lender.
  • No-tax return mortgages also require higher credit scores and lower DTI ratios.
  • Availability and specific requirements for no-tax return mortgages can vary among lenders and may change over time. It is important to contact a trusted mortgage lender to get the best deal. For this, one can trust HomeAbroad to connect them with lenders who specialize in No-Tax Return Mortgages.
  • With this mortgage option, borrowers can buy primary residences, investment properties, second homes, etc.

Find the best No Tax Returns Mortgage Lender

How Does a Mortgage Without Tax Returns Work?

Let us understand how a mortgage without tax returns works by following Joe Grates’ case:

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Mr. Grates is a music gig worker with an irregular income. He also lacks tax returns, a traditional document required to get approved for a traditional mortgage. He aspires to own a house in Los Angeles and contacts HomeAbroad to handhold him throughout the home-buying process. After HomeAbroad connects him with a trusted lender specializing in No Tax Return Mortgage, this is how things pan out for him:

  • Lenders determine Mr. Grates’ eligibility by reviewing his credit scores, DTI ratio, and overall financial stability.
  • Once the lender determines the eligibility, he asks for alternate documents like bank statements, cash reserves, asset documents, etc., to establish Joe’s credibility.
  • Satisfied with Mr. Grates’ creditworthiness, the lender proceeds with the mortgage application process. They discuss the loan terms, interest rates, down payment and monthly payment requirements, etc.
  • Then, the lender asks Mr. Grates to fill out the application accurately and submit it timely.
  • After reviewing the application, the lender finds everything to be in order and approves it.
  • The lender finally disburses the agreed loan amount, and Mr. Grates receives it in his bank account in a few days.

Requirements for Mortgage Without Tax Returns?

As mentioned above, borrowers need to meet some criteria to be eligible for a Mortgage Without Tax Returns. These requirements are as follows:

  • Credit Score: 600 or higher
  • Down Payment requirement: 20-25% of the price
  • Debt-to-income Ratio: 40-45% or lower
  • Documents: 12-24 months bank statements, P&L statements, cash reserves, asset documents, 1099 forms, etc.

How to Get a Mortgage Without Tax Returns?

Here is a step-by-step process for getting a no-tax return loan:

Step 1: Determining the right loan program

Various types of loans do not require tax returns. Borrowers must determine which type of loan program would suit them the best. For example, real estate investors can opt for a Debt Coverage Service Ratio loan, and self-employed borrowers can choose bank statement loans.

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Step 2: Finding the right lender

Finding a lender that provides your chosen loan program and best understands your needs is vital in the home-buying process. It might be challenging to find a lender who offers flexibility and does not include tax returns in the loan application process.

However, you can contact HomeAbroad to make this process a cakewalk. We can connect you with no-tax return mortgage lenders who offer competitive deals and prioritize your needs.

Find the best No Tax Returns Mortgage Lender

Step 3: Initial review process with the lender

Once you have finalized the lender, during your initial meeting, the lender will check your credit scores, DTI ratio, and overall financial profile to determine your eligibility. If you meet their basic requirements, you will proceed to the next step.

Step 4: Gather the necessary documents

This step includes gathering all the documents that your lender requires to approve your loan. Assemble all necessary documents, such as the last 12 to 24 months’ bank statements, P&L reports, evidence of cash reserves, asset records, 1099 forms, etc.

Additionally, the lender can recommend certain supplemental paperwork. Send the completed application and the gathered supporting documentation to the selected lender. The lender will review the application and the documents.

Step 5: Mortgage approval process and closing deal

Lenders review everything you submit carefully. After being satisfied with your eligibility, the documents you shared, and the application you submitted, they will approve the loan request. Lenders will offer terms and conditions, like loan terms, interest rates, down payment, mortgage payment, etc.

Review them carefully and seek clarification if you find any discrepancies. Proceed to close the deal once you are satisfied with the terms.

Step 6: Receive the loan amount

After the approval and closing, the lender will disburse the agreed-upon loan amount. The loan amount will be transferred to your bank account within a few days.

Loan Options for No Tax Return Mortgage

1. Bank statement loan:

  • Bank statement loan targets self-employed borrowers without standard paystubs.
  • Lenders assess income based on bank statements and P&L statements for 12-24 months.
  • A bank statement mortgage typically requires a minimum credit score of 620 or above, a down payment of 20-25%, and a debt-to-income ratio (DTI) of 45%.

Find the best Bank Statement Mortgage Lender

2. DSCR loans:

  • The DSCR loan program caters to a self-employed individual and a real estate investor.
  • It evaluates the borrower’s debt service capacity based on monthly gross income from investment property.
  • A credit score of 620 or higher and a DSCR ratio of 1 or above are required.
  • The down payment typically ranges from 20-25%, and applicants must provide specific documents like property appraisal and the 1007 rent schedule.

Find the best DSCR Mortgage Lender

3. No-Income verification loans:

  • No-doc mortgages are designed for self-employed individuals without traditional income documentation.
  • Lenders use alternative methods like bank statements, 1099 forms, or assets to assess credibility.
  • A credit score of 620 or higher and a down payment of 20-25% are recommended.

Find the best No-Income Verification Mortgage Lender

4. Asset-based mortgages:

  • Asset-based loans provide an alternative to traditional income verification.
  • Borrowers use assets like stocks, bonds, and real estate as collateral. Eligibility requires a DTI of 45% or less, a credit score of 620 or higher, and a down payment of 20-25%.

Find the best Asset-based Mortgage Lender

5. Self-employed mortgages:

  • The self-employed mortgage program is suitable for those owning 25% or more of a single business or working as contractors/service providers.
  • Instead of tax returns or pay stubs, lenders review 1099 forms and cash flow.
  • A credit score of 620 or higher and a down payment of 20-25% or more are typically necessary for qualification.

Find the best Self-employed Mortgage Lender

No Tax Return Mortgage Loans Vs. Conventional Loans

CriteriaNo Tax Returns MortgageFHA LoansConventional Loans
No Tax Returns Mortgage Vs. Other Loans

Current Mortgage Rates in the US

Please take note that the mortgage rates listed here are for informative purposes only and might not correspond to the actual rates provided by lenders. It is vital to keep in mind that No Tax Return mortgage rates could have higher interest rates than standard mortgage loan rates.

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Current Mortgage Rates In the US
Current Mortgage Rates in the US| Source: FreddieMac

As per FreddieMac, U.S. weekly averages as of 08/03/2023 were:

  • The rate for 30-yr FRM was 6.9%, with a 1-Yr change of 1.91.
  • The rate for 15-yr FRM was 6.25%, with the 1-Yr change of 1.99.

Finding Best Mortgage Lenders Who Do Not Require Tax Returns

Allow HomeAbroad to be your reliable advisor in the No Tax Return Mortgage space, and enjoy a hassle-free experience.

  • Our carefully selected network of licensed and knowledgeable lenders guarantees first-rate service with individualized mortgage programs catered to your objectives.
  • With our simplified application procedure, you may enjoy adjustable terms that meet your budget and lifestyle while skipping the paperwork and waiting periods.
  • Count on our knowledgeable, full-service mortgage lender, who respects transparency and guarantees no hidden costs or surprises, for professional advice and ongoing support. For a dependable and ethical mortgage solution, go with HomeAbroad.

Connect with the best No Tax Returns Mortgage Lender


Hope this article solved your queries on a mortgage without a tax return.

No tax return mortgage is a great option for the self-employed, freelancers, and real estate investors. HomeAbroad specializes in finding the right No Tax Return Mortgage lender to match your specific loan needs. Contact us today with any questions you may have about obtaining a no-tax return mortgage! We are committed to helping you get the best deal possible.