Whether you need a large loan or a small one, you of course have multiple options out there today. But a traditional lender may want to do a significant amount of research into your background if you are trying to obtain a significant amount of money. If you have decent credit, one way you may be able to expedite this process would be to seek out an alternative documentation loan program. Here's what this type of program might entail and why it might be a good idea for you.
Alternative Documentation Means You Provide the Lender with Tax Documents, Paystubs, and Other Information
A traditional loan may require employment verification or a deep dive into your credit history that could take some time. If a lender accepts alternative documentation, you may be able to furnish them with your last W-2 or 1099-MISC form to the IRS, your last paystub from work, your bank statements from the last couple of years, or other information that will immediately help make your case for the loan. It can require a little extra legwork on your part, but it's also a great way to help make your case directly instead of hoping the lender likes what they see when they start pulling reports on their own.
Alternative Documentation May Be the Best Option If You Are Self-Employed or a Freelancer
In some cases, your specific type of job might not be ideal for getting a loan like a mortgage or another significant purchase. Self-employed individuals who work for multiple different firms as a freelancer might need to gather together 1099-MISC forms from multiple companies in order to provide a complete picture of their current worth and ongoing income to the potential lender.
Alternative Documentation Can Help You Close the Deal Faster and Take Advantage of an Opportunity
When you put the process of gathering all of the paperwork or financial data into the hands of the lender, it could take some time to close on the mortgage or whatever other type of loan you are looking for. That could be bad for you if you know the seller of the house wants to move quickly or if there is just some other opportunity that requires immediate funds. By bringing your financial documents directly to the lender, you may satisfy their questions sooner rather than later and get the green light to move forward with your loan or transaction.
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