Ask the expert : We have good credit and assets but our income isn't steady. So how can we get a mortgage?
Ask the expert We have good credit and assets but our income isn't steady. So how can we get a mortgage? The Alternative A mortgage (Alt-A) could be the answer for you. This type of mortgage is given to borrowers who can't fully document their income. Banks and larger lenders stopped approving them during mortgage-crisis era. Some have gone back to making them, but it's mostly smaller lenders who are making Alt-As. The newer forms of this loan require borrowers to have good credit and substantial assets or income, even if they can't produce verification of annual wages. There are no regulatory guidelines for who will qualify for an Alt-A, so each lender has its own requirements. Lenders now call them "nonqualified mortgages." Borrowers who have good credit but might be self-employed or report income sporadically are more likely to apply for them, but that's because more Americans are working that way. Some money managers expect the market to increase to more than 10 percent of total mortgage debt outstanding. Sometimes called "liar loans" because they were abused during the housing crisis, today's nonqualified mortgages require a credit score of at least 700. Documentation of income is usually some combination of proof of assets, bank statements and tax returns. Mortgage interest rates are 5.5 percent to 8 percent, depending of various factors, and most are 30-year mortgages. Among larger lenders, New York's Neuberger Berman, and Pasadena, Calif.-based Western Asset Management, a division of Legg Mason, Inc., are planning to roll out new Alt-A mortgages in the coming months. Quicken Loans decided against it because of the regulatory environment, they say. This type of loan could work for you, so check it out. But money managers say borrowers don't seem to be that enthusiastic about it right now.