Unconventional Mortgage Programs: Exploring Alternative Paths to Homeownership
When it comes to purchasing a home, conventional mortgage programs may not always fit every borrower’s unique circumstances.
But….fortunately, there are options out there.
With numerous unconventional mortgage programs available, we’ll go through them with our mortgage expert Sam Ryzhikov from Fort Funding Corp. Link to Sam’s Zillow Profile
The 12-Month Bank Statement Program:
This loan program is designed for self-employed individuals or those with non-traditional income sources who cannot provide the traditional income verification documents. Instead of tax returns or W-2 forms, lenders evaluate an applicant’s income based on their personal or business bank statements from the past 12 months. This program allows borrowers to show their ability to repay the mortgage based on their cash flow.
The Debt Service Coverage Program: (DSCR Loan)
The debt service coverage program targets investors and landlords who receive rental income from their properties. Traditional mortgage programs typically consider only the borrower’s personal income, which may not adequately reflect their ability to manage additional mortgage payments. With the debt service coverage program, lenders factor in the property’s rental income to determine the borrower’s eligibility and loan amount. This program enables real estate investors to leverage their rental properties and expand their portfolios, all while enjoying the benefits of homeownership.
The No Ratio Program:
The no ratio program is an ideal solution for borrowers whose income-to-debt ratio might not meet the strict requirements of traditional mortgage programs. Instead of basing it on income and debt levels, lenders assess other aspects of the borrower’s financial profile. This includes credit history, assets, and down payment. Additionally, by taking out the income verification step, this loan provides a streamlined path to mortgage approval. This makes it especially important for individuals with high net worth or multiple income sources.
Unconventional mortgage programs open doors to homeownership for individuals who don’t fit the traditional lending mold. It’s important to explore and understand these alternative paths to homeownership or investments!
Remember to consult with a mortgage professional to determine the best option for you!
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