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Lite Doc: The Top Alternative to No Ratio Loans

September 5, 2023
by Chris Teague
Sept. 20, 2020
Last updated: September 5, 2023

The information on this page is provided for the benefit of mortgage professionals and not intended for consumers or the general public.

As a mortgage professional, your mission is to help borrowers achieve their dreams of homeownership while navigating the intricate landscape of loan options. In this pursuit, you’ve likely encountered scenarios where borrowers’ financial profiles don’t fit neatly into traditional lending criteria. This is where alternative loan programs come to the rescue. One such program that’s generating buzz in the industry is Quontic Bank’s Lite Doc Loan Program. In this article, we’ll explore why Lite Doc loans are a fantastic alternative to No Ratio loans and how they can revolutionize your approach to assisting unconventional borrowers.

Understanding the Landscape: No Ratio Loans and Their Limitations

No Ratio loans have been a go-to option for borrowers with unique income situations. These loans don’t require the borrower to provide income documentation, which can be a relief for those with non-traditional income sources or complex financial structures. However, No Ratio loans have all but disappeared from the industry landscape due to a variety of factors including:

  1. Regulatory Changes: The financial crisis of 2008 prompted significant regulatory reforms in the mortgage industry. The Dodd-Frank Wall Street Reform and Consumer Protection Act, passed in response to the crisis, introduced stricter lending standards to prevent the risky lending practices that had contributed to the crisis. These changes emphasized the importance of verifying a borrower’s ability to repay a loan, making it more challenging to offer loans without income documentation.
  2. Risk Management: Lenders and investors became more risk-averse after the financial crisis. No Ratio loans, which involve little to no verification of income, are inherently riskier for lenders because they lack a comprehensive understanding of the borrower’s financial situation. Lenders increasingly favored loans with verified income and stricter underwriting processes to mitigate potential risks.
  3. Investor Preferences: Mortgage-backed securities, which are bundles of mortgages sold to investors, became subject to greater scrutiny. Investors sought higher-quality loans with proper documentation to reduce the chances of default. This shift in investor preferences influenced lenders to focus on loans with thorough income verification.
  4. Availability of Alternative Options: As the industry recognized the need for more inclusive lending options for self-employed individuals and those with non-traditional income, new loan programs like Lite Doc and Bank Statement loans emerged. These programs strike a balance between accommodating borrowers with unique income sources and maintaining a level of responsible underwriting.

Introducing Quontic Bank’s Lite Doc Loan Program: A Game-Changer

Enter Quontic Bank’s Lite Doc Loan Program, an innovative solution that bridges the gap between No Ratio loans and traditional lending. This program is tailored for self-employed individuals, freelancers, entrepreneurs, and others with fluctuating income streams. Let’s delve into the benefits that set Lite Doc loans apart and make it a great alternative to No Ratio loans.

  1. Reduced Documentation: Quontic’s Lite Doc loans live up to their name by requiring minimal documentation compared to traditional loans. While No Ratio loans don’t necessitate income verification, Lite Doc loans don’t require W2’s or tax returns and instead require only unaudited VOE on current income for salaried workers or accountant prepared, unaudited 12 month P&L for the self-employed.  
  2. Broader Approval Criteria: With up to 80% LTV, 50% DTI and 660 minimum FICO score, borrowers can access loan amounts up to $3,000,000 giving them more purchasing power.
  3. Unique Features: Quontic’s Lite Doc program allows second homes and 100% gift funds for down payment and closing costs. And self-employment is only required for 1 year. 
  4. Versatility: Quontic Bank’s Lite Doc Loan Program is available for home purchase or refinance (including cash-out) for both owner-occupied and investor properties.

Empowering Brokers and Loan Officers: How Lite Doc Loans Expand Opportunities

As mortgage brokers and loan officers, embracing Quontic Bank’s Lite Doc Loan Program as an alternative to No Ratio can transform the way you serve your clients:

  1. Diverse Clientele: Lite Doc loans open doors for a broader range of borrowers, from gig economy workers to those with complex financial portfolios.
  2. Enhanced Credibility: By offering a forward-looking alternative to No Ratio loans, you position yourself as a knowledgeable professional who keeps up with evolving industry trends.
  3. Financial Growth: Lite Doc loans enable you to assist more clients, expanding your business and strengthening your reputation within the industry.
  4. Client Trust: Providing borrowers with options that align with their financial reality fosters trust and loyalty, enhancing your long-term client relationships.

In Conclusion

Quontic Bank’s Lite Doc Loan Program isn’t just an alternative; it’s a transformative solution that balances the needs of unconventional borrowers with the prudence of responsible lending. By embracing Lite Doc loans, mortgage brokers and loan officers can reshape their approach, empower their clients, and contribute to a more inclusive housing market. It’s time to step into the future of lending and unlock new possibilities for borrowers and your business alike. Learn more about Quontic’s Lite Doc program on our website where you can also request to become an approved broker or contact Quontic Wholesale directly to learn more.

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