Alternative Documentation

As we shared in a couple other posts, sometimes the buyer is able to purchase a home but the needed documentation may not line up with conventional requirements. The most common two solutions are bank statement loans for self employed or alternative income streams and DSCR for investment properties. But that doesn’t complete the list, there are several other options available through the broker channel.

Asset Depletion

A product that could be used more frequently if more clients or loan officers knew about it, Asset Depletion is for clients with a lot of assets but may not have a job or don’t make enough to qualify using conventional income guidelines.

Basically asset depletion is taking the total number of available assets and dividing those out over a set period of months to act as “income” for qualifying. Conventional loans have this guideline available but you divide the assets over the term. For example, if you have $1,000,000 in assets and divide it over a 30 year term (360 months) that gives the loan officer $2,778 in usable income for the file. But as brokers we have a lender that will divide that number by as little as 60 months. So that $2,777 of monthly income turns into $16,667.

Asset Depletion is a surprisingly simple product for retirees and others who want to get a loan without committing most of their assets towards a cash purchase.

Community Mortgage – No Ratio

You might be thinking, this seems like those Ninja loans from before the financial crisis. Well there are similarities but with a large difference. A big down payment is required. In the run up to 2008, there were many programs that did not require income or asset documentation, but at the same time did not require large down payments. With our No Ratio product what secures the home is a down payment of at least 20%, and a required amount of reserves. We bring a tailored loan program designed to provide flexibility and help you qualify for the financing you need, even with limited income documentation.

P&L Only / 1099 / W2 only / WVOE

Sometimes timing is everything, and it isn’t always good timing. When life happens and a unique situation arises, the next purchase may not need to be delayed.

Profit and Loss Only, A loan solution for self-employed borrowers using CPA-prepared P&Ls to qualify income through alternative documentation.

1099 program, a mortgage solution for independent contractors using 1099 income to simplify qualification.

W2 only, a streamlined loan solution for full-time W-2 borrowers using employer-verified income for faster approvals.

WVOE, written verification of employment, a flexible qualification solution using written verification of employment instead of traditional income documentation.

All of these options require 10-20% down, but if creativity is needed and it makes sense to utilize alternative documentation, J. Charles Lending may have the right option for you.