No-Doc, NINA & NINJA mortgage loans are all mortgage loans chiefly associated with borrowing money the United States. On this page, we will therefore focus on what they mean in a U.S. context.
No-Doc = No documentation
With a No-Doc mortgage loan, the applicant can be approved for the mortgage loan without providing the lender with any documentation regarding his or her credit worthiness, such as proof of income or credit score.
No-Doc mortgage loans are typically marketed to borrowers whose income isn’t documented or who have very little credit history in the United States.
When a lender decides whether or not to approve your application for a no-doc mortgage loan, one of the most important factors will be the valuation and saleability of the property that will be used as collateral for the loan. If you fail to adhere to the repayment plan, the property will be foreclosed and sold to repay your loan.
Since the value of the collateral is so important for a no-doc loan, many lenders want there to be a larger than normal margin between the size of the mortgage loan and the valuation of the property that will be used as collateral for the loan.
Since no-doc loans are considered riskier for the lender than traditional mortgage loans, they tend to come with a higher interest rate.
A low-doc mortgage loan is a hybrid between the traditional mortgage loan and the no-doc mortgage loan. It does require some documentation to be provided by the applicant, but not as much as for a standard mortgage loan.
The low-doc mortgage loan has become popular among people who can not provide tax returns as evidence of income but can provide some other documentation supporting their claim of credit worthiness, e.g. bank statements and credit score.
Since the U.S. subprime lending crisis, it has become difficult to be approved for a low-doc mortgage loan without a high enough credit score.
Generally speaking, the interest of a low-doc mortgage loan is lower than for a no-doc mortgage loan, but his is just when we look at averages – there are big individual variations.
NINA = No Income, No Assets
An individual without any proof of income nor proof of assets can still be approved for a NINA mortgage loan. In most cases, proof of creditworthiness in the form of a high enough credit score will be required, so it’s not a no-doc loan.
NINJA = No Income, No Job, No Assets
A individual without any proof of income, nor job (employment), nor assets can still be approved for a NINJA mortgage loan. In most cases, proof of creditworthiness in the form of a high enough credit score will be required, so it’s not a no-doc loan.