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Underwriting Guidelines for a No-Ratio Loan

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TERMINOLOGY

When you apply for a No-Ratio loan, no income information is needed by your lender. Since you are not providing any income specifics, the lender does not calculate your debt-to-income ratio when making their decision on your mortgage loan. The lender can make their decision based on your credit and the amount of your down payment or equity in your home.

Loan Specifics

No-Ratio mortgages can be used to purchase a single family home, townhouse, condominium, or qualified manufactured housing. A cash out refinance is possible if the amount is within the lender’s loan guidelines.

A No-Ratio loan is ideal if you have more debts than a mortgage lender allows for conventional mortgages. The maximum debt ratio allowed is generally 40 percent for a conventional mortgage loan.

Interest Rate

The interest rate will usually be about a half point higher than the rate for a conventional mortgage, however the lender may raise the rate depending on your credit score and the loan-to-value ratio on the property. Most lenders also require you to have been employed for a minimum of two years at the same job, or they may also increase your rate.