There are different options available if you plan to refinance your current mortgage. Now, why would homeowners want to refinance their mortgage? There are actually many reasons for that, and the most common are: to receive cash out at closing, eliminate private mortgage insurance, and obtain a fixed rate.

Taking a new mortgage is somehow involved in home loan refinancing so you have to have the important documents to present the mortgage company. But there are also ways for you to obtain a loan with minimal documents if you want to protect your privacy.

The best way to have some privacy is getting a no doc refinance loan. However, not all lenders are the same as some are okay with granting a refinance with no documentations, there are also others that are not willing to take any chances. In getting a no doc loan, the process is quite easy; the homeowner will just have to give out their social security number and loan amount on the loan applications. Now, it is entirely up to the lender to give loan approval that is based on the credit scores. In simple terms, to have a no doc loan, your credit score should be very high.

Low document home mortgage loans differ from no document loans. With low document loans, it requires the applicant to state income and employment history. The applicant may also supply recent paycheck stubs or income tax returns for the past two years. These loan programs are advantageous for self-employed or contract employees. Moreover, individuals who also receive cash payments can get a low document refinance loan.

No document refinance loans, on the other hand, are much preferred by individuals who simply want to maintain their privacy. There are just some people who are not willing to just give out detailed information on their employment, income, and finances.

Traditionally, lenders do not just approve loans with little or no documentation but just by looking at a very good credit report, they reason that an applicant wouldn’t just do anything bad to tarnish their perfect credit report. So they approve a no doc loan to this type of applicant.

While no doc and low doc home mortgage loans involve a speedier process, be ready to pay a higher interest rate on your home loan. If privacy and speed are main factors, a higher rate may not be a major drawback.

But if the applicant would want to refinance his home mortgage loans just to get a lower interest rate then probably, this no doc loan would not be a good option. The individual should always get a quote from a lender and have the refinance rate of the no doc loan compared with his current interest rate.