Explore the Mortgage101 Library
Check Local Mortgage Rates
Loan Program Choices
Use our calculator to find out your estimated monthly payment in advance: Enter the loan amount, interest rate, and length of mortgage.
Try our Mortgage Payment Calculator
A No-Ratio mortgage is a type of mortgage that does not require verification of your income. The mortgage lender will make their loan decision based on your credit rating and the loan-to-value of the property. If your income is difficult to prove, a No-Ratio mortgage is a viable alternative to a conventional mortgage loan.
Benefits of a No-Ratio Mortgage
Most mortgage lenders compare your monthly debt payments to your income to arrive at what is called your debt-to-income ratio. A No-Ratio mortgage loan does not take into account your income. Instead, it is concerned with your credit and the property. This type of loan can close quicker because it involves less documentation.
A No-Ratio loan can also be used if your debt-to-income ratio is higher than a lender allows. Ask your lender what their loan terms are for a No-Ratio loan, and what they require in order for you to qualify. If you are eligible and the loan structure is agreeable, you may want to consider this type of loan for your home purchase.
One of the biggest drawbacks of these loans are the fees and rates that are offered with this type of program. The rates can be as much as 2 to 4 times than conventional loan.
- Home Equity Loans for People with Bad Credit
- FHA Eligibility with Bankruptcy and Foreclosure
- Should You Refinance? Make Sure the Timing is Right
- Second Mortgages: Advantages and Disadvantages
- How to Get Approved for an FHA Loan despite Bad Credit
- 3 Reasons Banks Reject Short Sales
- 3 Warning Signs of Loan Modification Scams
- Alternatives to Getting a 2nd Mortgage
- What To Do When Mortgages Default