Rates are usually higher, yeah, but it’s not always a night-and-day difference—depends on your credit, down payment, and the lender’s risk appetite. One thing I’d push back on: sometimes, if you can wait a year or two and clean up your taxes, you might qualify for a regular loan with better terms. I know it’s not always possible, but worth weighing the long-term cost against the convenience. I went the “no tax return” route once and ended up refinancing a year later just to get out of the higher rate. Not saying it’s a bad option, just that the extra hoops might save money down the line if you can swing it.
Honestly, waiting a bit and cleaning up your taxes can save a chunk in the long run, but man, sometimes life just doesn’t let you hit pause. I looked at the no tax return loans last year—rates were higher, but not “break the bank” higher for me. Still, those extra fees add up fast. If you can hold out and get your ducks in a row, it’s probably worth it. But if you need to move now, sometimes you just gotta bite the bullet and refinance later.
I get where you’re coming from, but man, I’ve seen folks get burned waiting for the “perfect” tax situation. Life’s messy, especially when you’re self-employed—sometimes your ducks are more like squirrels on espresso. I actually jumped on a no tax return loan last year, and yeah, the fees stung a bit, but getting into the market sooner meant my equity grew faster than those fees could catch up. Not saying it’s for everyone, but sometimes overanalyzing costs more in the long run.
Totally get what you mean about waiting for the “perfect” moment—sometimes that moment never really shows up, especially if you’re self-employed. I’ve seen clients try to time everything just right, hoping for better tax years or lower rates, and meanwhile, prices keep climbing. Those no tax return loans aren’t cheap, but if the numbers work and you’re planning to stay put for a while, the equity can outpace the upfront costs pretty quickly.
One thing I’d add: lenders are all over the map with these loans. Some have way stricter requirements than others, and the fine print can get weird. I’ve had folks surprised by reserve requirements or higher down payments than they expected. Just something to watch for—don’t let the “no tax return” part make you skip the details.
At the end of the day, it’s a trade-off. Sometimes you pay a little more now to get in the game, and that can pay off big if the market’s moving. Other times, waiting makes sense, but only if you’re actually saving more than you’re missing out on.
I’ve been down this road and honestly, the “no tax return” loans felt like a lifeline at first, but there were some curveballs. Like you said,
I ran into a lender who wanted six months of reserves, which I totally didn’t expect. Plus, the interest rate was a full point higher than what my friend got with a traditional loan.“the fine print can get weird.”
Here’s what I learned the hard way:
- The upfront costs and higher rates add up fast. I had to really crunch the numbers to see if the equity growth would actually offset that.
- Some lenders wanted a bigger down payment than I’d planned for—like 25% instead of 20%. That stung.
- My credit score took a small hit from all the inquiries, which I didn’t realize would happen just shopping around.
I get the appeal, especially when waiting for the “perfect” moment just means watching prices go up. But I’d say, double-check every detail and don’t let the excitement of getting approved make you skip over the boring stuff. Sometimes it’s worth slowing down, even if it feels like you’re missing out.
