Applying for a home equity loan or refinance mortgage includes calculating a debt ratio to make sure it's within the underwriting guidelines, but for some folks, that can be a pain or a problem.

Some mortgage lenders, however, may be willing to expedite processing a home loan without asking for any income documentation, such as, tax returns, W-2 forms, or pay stubs. 

Instead, the lender will use the unverified amount of income that is stated on the application. There is, of course, a price to pay for this privilege, and that price would be a higher mortgage rate. 

The adjustment to the rate is usually based on the credit scores. For example, there could be a 1/2% add-on to the rate for a score of 700 or better, or a 1% add-on for less than a 700 score. 

Also, lenders offset their risk by adjusting the loan to value according to the borrower's credit scores. For example, a 700 credit score may be needed for a home loan up to 90% loan to value, a 680 score for a maximum 80% loan, or a 660 score for a maximum 70% loan to value.

While a stated income, or no doc loan means no income verification, the income on the application has to be consistent with the employment listed, and there may be asset verification required. A teacher who says he makes $150,000 a year, with no money in the bank, can be a red flag.