What Is a No-Ratio Mortgage?

For a no-ratio mortgage, the lender does not take into consideration the borrower's debt-to-income ratio. With most traditional mortgages, the lender will look at the amount of debt and income that a borrower has. They will compare these two numbers in the form of a ratio, and if the ratio does not meet their lending standards, they will not extend a loan. With the no-ratio mortgage, this information does not matter when it comes to approval.

In order to qualify for a no-ratio mortgage, you have to be able to meet some other qualifications. For example, many lenders will require you to have a very good credit score. You may also have to come up with a substantial down payment before they will consider your application. In some cases, you might also have to put up some type of collateral or have substantial assets that they can verify. If you had a large amount of money in your bank account or in an investment account, they might allow you to be approved for the no-ratio mortgage. This mortgage is beneficial for those that do not want to have to verify their income.

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