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What are the DTI Requirements on Non-QM Loans
How do non-QM mortgage lenders calculate debt-to-income ratio requirements on non-QM loans.
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1 Reply
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Non-QM loans maximum debt-to-income ratio cap is at 50%. Lenders of non-QM loans use alternative income to calculate debt-to-income ratio. Unlike traditional loans, non-QM (non-qualified mortgage) lenders calculate the debt-to-income ratio with flexible guidelines. Different methods can be used to do this, which include:
Bank statement loans: here, the DTI is calculated using income shown in 12-24 months of bank statements instead of tax returns or W-2 forms.
Asset-based loans: DTI may be based on liquid assets rather than monthly income.
DSCR: DSCR (debt service coverage ratio) loans are used for investment properties, and they consider rental income instead of personal income. Lenders usually have varying DTI limits depending on a person’s overall financial profile.
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