A Low Document Mortgage, also referred to as a low doc or no doc mortgage, is a mortgage loan that can be awarded to borrowers lacking conventional means of income verification. Typically, for this type of financing, little-to-no documentation is required by the lender. This means that the lender would not likely request documents such as tax returns, 4506 forms, or bank statements to evaluate for approval.
This type of financing is ideal for investors and self-employed borrowers looking to refinance, purchase, or renovate property. Because lenders consider low document mortgages high-risk, borrowers are often required to submit higher down payment amounts or pay points at closing to account for the risk.