For many homebuyers, providing tax returns is a standard part of the mortgage application process. Lenders typically request them to verify your income, particularly if you’re self-employed or have irregular income. But what if you don’t want or can’t provide your tax returns? Whether you’ve had low income reported on your taxes, complex financial situations, or prefer privacy, you might be wondering: Can you get a mortgage without using tax returns in Florida?
The answer is yes—it’s possible, but it depends on the type of mortgage, your financial situation, and the lender. Let’s explore how you can secure a mortgage without relying on tax returns in Florida and what options are available.
Why Lenders Ask for Tax Returns
First, it’s helpful to understand why most lenders request tax returns. Mortgage lenders typically assess your ability to repay the loan by reviewing your income history and financial stability. Tax returns provide a detailed snapshot of your earnings, especially for those who are self-employed, freelancers, or rely on irregular sources of income.
For salaried employees, lenders may still request tax returns to confirm any additional income, such as investment earnings or side businesses. But if you’re self-employed or have inconsistent earnings, tax returns are usually a crucial component of verifying your income for most conventional mortgages.
Mortgage Options Without Using Tax Returns
If providing tax returns isn’t an option for you, there are several types of mortgage products designed to accommodate borrowers with alternative income documentation. These loans are often referred to as non-qualified mortgages (non-QM) or alternative income verification loans. Here are some of the most popular options available in Florida:
1. Bank Statement Loans
Bank statement loans are one of the most common alternatives for those who can’t or don’t want to provide tax returns. With a bank statement loan, lenders verify your income by reviewing your bank deposits over a specific period, typically the last 12-24 months.
Here’s how it works:
- You’ll provide your bank statements (both personal and business, if applicable).
- The lender reviews the deposits to assess your average monthly income.
- The loan approval will depend on your debt-to-income (DTI) ratio, credit score, and other financial factors.
This type of loan is especially popular among self-employed individuals, business owners, freelancers, and gig workers, whose tax returns may not fully reflect their actual income due to deductions or irregular earnings.
2. Asset-Based Loans
Another option is an asset-based loan, also known as an asset depletion loan. In this case, instead of relying on your income, the lender assesses the value of your assets to determine your eligibility for a mortgage. This could include:
- Savings accounts
- Stocks and bonds
- Retirement accounts
- Investment properties
The lender calculates the potential monthly income you could generate from your assets, often using a percentage of your total assets over a set period (such as 10-30 years). This approach is ideal for borrowers with significant assets who may not have high taxable income but can show they have the financial capacity to make mortgage payments.
3. No-Income, No-Asset (NINA) Loans
A No-Income, No-Asset (NINA) loan is an option for borrowers who have difficulty documenting their income or assets. This type of loan relies more on your credit score and the value of the property itself rather than traditional income verification methods.
While these loans were more common before the 2008 housing crisis, they’ve resurfaced in niche markets for borrowers with strong credit scores who don’t have verifiable income. These loans typically come with higher interest rates and larger down payment requirements since the lender is taking on more risk.
4. Stated Income Loans
Stated income loans, sometimes referred to as “liar loans” in the past, allow you to state your income without fully documenting it. Instead of tax returns, lenders rely on bank statements, a letter from your CPA, or other financial documentation to estimate your ability to repay the loan.
These loans were once more common but have become less prevalent after the financial crisis due to increased regulation. However, they’re still available through non-QM lenders for borrowers with unique income situations. You’ll need strong credit and a significant down payment to qualify.
5. DSCR Loans for Investment Properties
For real estate investors in Florida, a Debt Service Coverage Ratio (DSCR) loan is an excellent option that doesn’t require tax returns. Instead of verifying personal income, the lender looks at the rental income the property is expected to generate.
The DSCR is calculated by dividing the property’s rental income by the mortgage payment. A ratio of 1 or higher typically means the property generates enough income to cover the loan payments, making this an attractive option for investors with rental properties.
FHA and VA Loans Without Tax Returns
If you’re considering FHA or VA loans, the use of tax returns is generally more common, especially if you’re self-employed. However, if you’re a salaried employee with a stable income, FHA and VA lenders may accept pay stubs and W-2s as income verification without requesting your tax returns.
The key here is to ensure that your debt-to-income ratio (DTI) falls within acceptable limits (usually 43% or lower for FHA loans) and that your credit score meets the minimum requirements.
Lender Requirements and Flexibility
It’s important to note that lender requirements vary widely, especially when it comes to non-QM loans. Some lenders may be more flexible than others, so it’s crucial to shop around and find a lender who specializes in alternative income verification loans.
You’ll also want to be prepared for potentially higher interest rates and larger down payment requirements when opting for a mortgage that doesn’t rely on tax returns. Lenders are taking on more risk, which means the cost of borrowing may increase. However, these loans can still be a valuable path to homeownership if traditional documentation isn’t an option for you.
Florida Housing Market Considerations
As one of the hottest real estate markets in the U.S., Florida remains a highly competitive area for homebuyers. Cities like Miami, Orlando, and Tampa have seen significant growth, and the demand for homes is strong. Securing a mortgage without tax returns can be a strategic advantage if your financial situation aligns with non-QM loans, particularly if you’re self-employed or have significant assets but lack conventional income documentation.
Because Florida’s real estate market is fast-moving, pre-approval is a vital step to ensure you’re ready to make a competitive offer. By securing a non-QM loan pre-approval, you’ll know your budget and demonstrate to sellers that you’re a serious buyer.
Conclusion: Can You Get a Mortgage Without Tax Returns?
Yes, you can absolutely get a mortgage without using tax returns in Florida, but it depends on your financial situation and the type of loan you’re pursuing. Non-QM loans, such as bank statement loans, asset-based loans, and DSCR loans, provide viable alternatives to traditional mortgage products. While these loans may come with higher interest rates and larger down payments, they can be an excellent solution for borrowers who have non-traditional income streams or prefer not to disclose their tax returns.
If you’re interested in learning more about your mortgage options without tax returns, Select Home Loans can help guide you through the process. Contact SelectHomeLoans.com to explore your mortgage options and take the next step toward homeownership in Florida.
