No Ratio Loans

UPDATE: No ratio loans do not exist anymore with any mortgage lender.  All borrowers need to show proof of income regardless of FICO scores. 

If you are self employed you will need to show full tax returns with all schedules.  There are instances where you can add back in deductions such as your depreciation and depletion to make your income appear greater and there is also the option of amending your taxes so you can qualify.

If you are unsure of just what to do feel free to give us a call today and have one of your professional mortgage professionals look at your options.

No Ratio loans do not require income to be stated on the application nor is it verified. The No Ratio loan does not take into consideration your debt-to-income ratios. This type of loan is perfect for someone that has high debt ratios. You can get up to 100% financing with no ratio loans depeding on your credit.

Borrowers with good credit history could qualify for no ratio loans. Often 100% financing is offered by many lenders, however, the interest rates are always higher than the loans with less than 100% financing.

No ratio loans are great for investors, individuals who do not want to deal with the hassle of providing a lot of income documentation, borrowers with potentially higher than normal debt to income ratios, borrowers who have hard to document income, borrowers who are self employed or commissioned, and many other home loan scenarios. Keep in mind that along with the reduced documentation you will generally be required to pay a higher interest rate which equates to a higher mortgage payment. Ask your mortgage professional to show you the difference in rates and payments between utilizing a full income documentation program and a no ratio program.

No ratio option allows borrowing more than a borrow would normally qualify. So, it is important for each borrower to determine how much they could truly afford to prevent potential personal financial disaster.

This is a great program for getting around ratio issues. Especially if you can't "state" income due to job type and not being able to "state" a high enough, beleivable income.

This is also great for investors that have good income but ratios are out of whack due to "negative rent" on other investment properties.

A no ratio loan typically carries a slightly higher interest rate due to the fact your income is not a factor in the loan qualification process.

These loans are usually only available to borrowers with very good credit scores or borrowers who are borrowing a lower percentage of the value of their property. The underwriting theory would be that the added risk associated with not factoring the income ratios is offset by the good credit or low loan to value.

Many property rehab projects, or quick construction projects are financed with no ratio loans.

You are responsible for providing an accurate figure when the loan officer ask's for your income amount. The loan officer should not coach you or fill in the amount for you. If the loan is audited and fraud is discovered you and or the loan officer can be held accountable under the law.

No ratio is an excellent option for self-employeed borrowers, who can actually afford the payments, but who have problems documenting the income. For example, a businessperson who owns ten stores will have difficult time documenting the income even though his/her income is high enough to qualify for a fully documented loan program.

Even though incomes are not disclosed by the homeowner or verified by the lender, the source of income, the homeowner's employment, is still verified.

No Ratio Loans are actually much easier to process for everyone involved in the transaction because there is less paperwork. You have no income documentation/verification along with no assett documentation/verification.