Non-Traditional Mortgage Products
Non-Traditional Products
Non-Traditional loan products have been developed to service borrowers with unique financial and credit situations, offering flexible solutions for self-employed individuals, real estate investors, and those with substantial assets but non-traditional income sources.
These products are offered by private institutions and therefore the terms and conditions (including downpayment requirement, pre-payment penalties and even interest rates) can vairy from lender to lender.
Because these “niche” products are offered to borrowers who are unable to find traditional mortgage loans, they may be subject to higher rates and/or closing costs than traditional mortgage loans.
DSCR Loans
Qualify real estate investors based on the property’s income rather than personal income.
Bank Statement
Allow self-employed borrowers to qualify using bank deposits instead of traditional income documents.
Asset Depletion
Borrowers with substantial assets and limited income may be able to qualify for a mortgage without liquidating their positions.
Compare Non-Traditional Products
Non-Traditional loan products have been developed to service borrowers with unique financial and credit situations, offering flexible solutions for self-employed individuals, real estate investors, and those with substantial assets but non-traditional income sources.
|
Feature
|
Debt Service Coverage Ratio (DSCR) Loan
|
Bank-Statement Loan
|
Asset Depletion Loan
|
|---|---|---|---|
|
Minimum Down Payment*
|
Typically 20-25%
|
Typically 10-20%
|
Typically 20-25%
|
|
Credit Score Requirement*
|
Typically 620+
|
Typically 600+
|
Typically 640+
|
|
Income Documentation
|
No personal income verification required, relies on property cash flow
|
12-24 months of personal or business bank statements
|
Liquid assets are divided over a set period to determine qualifying income
|
|
Qualification Basis
|
Focus on property’s debts versus income
|
Deposits personal or business bank deposits
|
Based on liquid assets converted to income
|
|
Who it Benefits
|
Real estate investors with cash-flowing properties
|
Self-employed borrowers with inconsistent or hard-to-document income
|
Borrowers with substantial assets but limited or no traditional income
|
|
Property Type Restrictions
|
Investment properties only
|
Primary, second home, and investment properties
|
Primary, second home, and investment properties
|
|
Loan Limits
|
Varies by lender
|
Varies by lender
|
Varies by lender
|
|
Debt-to-Income Ratio
|
Eligibility based on properties DSCR
|
Typically up to 50% DTI
|
Based on asset conversion, no strict DTI
|
|
Mortgage Insurance
|
Not required
|
Not required
|
Not required
|
|
Pre-Payment Penalties
|
Typical. Longer periods can yield better rates
|
No Penalty on Primary Residence. Varies by lender
|
No Penalty on Primary Residence. Varies by lender
|
*Thresholds may vairy by lender.
Exhale Lending is a mortgage brokerage firm that embodies trust, transparency, and a genuine desire to help clients achieve financial serenity. With our client-centric approach, expertise, and unwavering commitment to excellence, Exhale Lending is poised to make a meaningful impact on the journey towards homeownership for individuals and families alike.
Subscribe Newsletter
Exhale Lending, L.L.C.
Equal Housing Opportunity
Office Location
Cary, NC 27511