The Alt-A Mortgage: Could You Benefit?

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Alt-A Mortgage

As a rule, the majority of conventional mortgage lenders in Texas won’t approve a new home loan prior to applicants providing proof of their earnings and passing a mandatory credit check. In fact, many mortgage lenders in the United States will also ask to see evidence of what funds people have available to put down upfront as a down payment on a property.

What, however, if mortgage lenders didn’t have to see and check so much paperwork? Would this make things easier? Well, with Alt-A mortgage products, some mortgage lenders are already offering mortgages with relatively minimal vetting of potential home buyers. The only question is, what is an Alt-A mortgage and who do such mortgage products benefit?

• 12 and 24 months bank statements
• Up to 90% LTV
• Primary, 2nd Home & Investment
• Up to $3 million loan amount
• Credit scores as low as 500
• Interest Only option available
• Non-warrantable condos available

What is an Alt-A Mortgage?

Almost everyone is familiar with what constitutes a prime and subprime mortgage. The better credit a person has, the more likely they are to qualify for a prime mortgage with a lower rate of interest. Poorer credit on the other hand, will see mortgage lenders attempt to offset the risk associated with lending by charging higher rates of interest.

Sadly, prime and subprime mortgage options still don’t meet the full needs of many people in need of financing. If, for example, a person is self-employed, they will often find it difficult to provide adequate proof income. An Alt-A mortgage, in this case, is essentially a mortgage product which requires much less documentation than a traditional prime, subprime, or even FHA home loan.

How an Alt-A Mortgage is Calculated

When mortgage lenders calculate Alt-A mortgage rates, they do so by looking at a person’s credit score and the loan to value ratio of a mortgage. Moreover, as a general rule, interest rates applied to Alt-A mortgage products will reflect the health of an applicant’s credit score. What needs to be remembered first and foremost, however, is that even if a person has a favorable credit rating, the interest rates applied to Alt-A mortgage products will still be considerably higher than those applied to traditional prime and subprime mortgages.

Might a Low Documentation Loan be Right for You?

If you have a unique situation or you are self-employed, an Alt-A mortgage might be the only option available to you when it comes to financing a property purchase.

What They Say about signature Lending

The team at Signature Lending were wonderful, outstanding, helpful and very respectful mortgage company. My experience with a prior servicer was terrible and I am glad I chose Signature Lending to help me on my purchase.

Amy Sanders

Mark has been very detailed, hardworking and knowledgeable throughout this whole process. My husband and I are expecting so we are very anxious to make sure our first home purchase is a positive experience. We appreciate Mark and his staff's superb effort and we have the fullest amount of faith in Signature Lending Services.

Mary Ann Kelly

The team at Signature Lending were wonderful, outstanding, helpful and very respectful mortgage company. My experience with a prior servicer was terrible and I am glad I chose Signature Lending to help me on my purchase.

Amy Sanders

Mark has been very detailed, hardworking and knowledgeable throughout this whole process. My husband and I are expecting so we are very anxious to make sure our first home purchase is a positive experience. We appreciate Mark and his staff's superb effort and we have the fullest amount of faith in Signature Lending Services.

Mary Ann Kelly