No ratio loans are ideal loans for those who can verify employment for 2 years in the same industry (ideally the same or similar job), but do not want to verify income and they are one of the best kept secrets in the mortgage industry. They require employment verification and asset verification for purchases, but rarely require verification of assets for refinances. The income section of the application is left blank . The borrower's title/job description must be one that would reasonably support the ability to repay the mortgage, but the nice thing about these loans is that you do not have to state (or "overstate") your income as some lenders will have you do to qualify. The loan has to make sense. For example, if you were looking to borrow $350,000 and your title was administrative assistant, it would be unlikely that we could approve the loan since typically someone in that position is not paid enough to be able to afford a payment on a loan that size. A no doc loan or a no income, no asset loan would be more appropriate in this situation. On the other hand, if you are self-employed, straight commissioned or in position where it is believable that you could have enough income to qualify and you do not feel comfortable stating your income, but you have the capacity to handle the mortgage payment then this is a good loan for you. .
No Ratio loans require asset verification for purchases, but for most refinances we can consider the equity in the property or the cash-out (if any) in lieu of verifying assets. In fact, a refinance with cash-out is very similar to "no income, no asset loan" because the cash out can satisfy any asset requirements.
These loans are available at aggressive rates for an 80/20 (100% financing) with an interest only option for purchase with a 680 middle credit score for 1 or 2 unit properties that will be owner-occupied. 100% financing is also available with a 620 middle credit score (also as an 80/20). In this case, the rate on the second mortgage is very high, but neither the first or the second mortgage has a prepayment penalty. Please call to discuss your individual situation as we are constantly rolling out new programs.
For no ratio refinances and cash out refinances we lend up to 80% loan to value based on the current appraised value without any seasoning requirements. This works well if you acquired a property within the past few days or months either under market value or if you recently closed on new construction and the builder has since raised prices. It can help you pay off a high rate second mortgage that you may have needed to purchase the house with little or nothing down or you can pull cash-out of a recently acquired property. There just needs to be legitimate comps of similar closed homes at higher prices. Please call us at 1-800-414-5285 for more information.
No ratio loans do not require you to sign an IRS 4506 and are available with a 10 year interest only option. They do require a verification of employment (usually via telephone).
They are good loans whether you are self-employed or not and they are a good solution for those who make commission or bonus income, but do not want to state their income and prefer to leave the income section of the loan application blank.