The term “liar loan” is used colloquially in reference to state income loans (also known as no doc loans). A liar loan is a mortgage – and therefore secured by collateral, making proof of income unnecessary.
When an applicant applies for a liar loan, they state their income on the loan application. The lender does not verify the borrower’s income. No salary statements or other proof-of-income documents are required.
This type of loan is useful for borrowers who are unable to provide salary slips because they are self-employed and for people who prefer not to disclose sensitive information about their income to lenders.
Liar loans are not offered by Swiss lenders.
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