“No Doc” loans (No Documentation) loans may be coming back to the mortgage market.

However, these loans got some bad press after the credit crunch and were used as the scapegoat by much of the press – dubbed the “liars loan” as no or very little documentation was required. Therefore they may not be ready to make a comeback just yet.

They are, however, expected to become available again in the near future according to Dustin Hobbs, spokesperson for the California Mortgage Bankers Association (CMBA). Some experts say they could return in six months some are guessing a little bit of a longer time frame.

The self-employed who are actually appropriately qualified are finding that getting a loan is a bit difficult are perfect candidates for No-Doc loans, which despite the bad press they received, if used correctly are a great product which really cuts down time between pre-approval and closing. Experts say that the self employed should keep persevering on trying to get approved with traditional products and not give up hope.

For those looking at refinancing their property, many wish for this type of no-doc product now, however if you are a proactive borrower who is looking to work with a lender to show that you are a low risk borrower then you may get lucky and have to provide relatively minimal information. (Freddie Mac have created a nice Youtube video to help those prepare mortgage documentation)

Also, Mortgage rates have fallen for the third consecutive week – meaning that mortgages for buyers and for those refinancing are getting more and more attractive. The 30-year fixed-rate mortgage averaged 5.14% this week down from last week when it averaged 5.20%. This is excellent news – For a 30-year fixed-rate mortgage, the rate reduction over the past five weeks translates into a monthly payment saving of $56 on a $200,000 loan.

In short – watch this space for more as this story develops, but it is clear that now really may be the best time to buy!

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