Traditional mortgage lending relies on paychecks and other stringent requirements. But that doesn’t suit today’s workforce, does it?
Our changing labor landscape requires a lender who can adapt. In other words, a non-traditional mortgage lender who takes a different approach.
But let’s be clear: “non-traditional” does not mean “risky.”
It means flexible and inclusive. It means including gig workers, freelancers, entrepreneurs, drivers, and people who have historically faced lending discrimination.
In fact, for some a non-traditional mortgage loan is the key to achieving homeownership.
So let us explain what non-traditional mortgage lending is, as well as specific options available to you. We’ll also equip you with knowledge of the potential dangers of “alternative mortgage lenders,” and how they differ from a reliable lender.
But first, let’s dig into why non-traditional mortgage lending is more important than ever.
The Imperative of Inclusive Lending
As someone living in this time, you probably already feel it: the traditional mortgage lending model is out of touch.
Here’s data to verify that unshakeable feeling: gig economy work is only growing, with an expected rise of 30 million globally in 2025. According to the U.S. Census Bureau, the majority of gig workers in recent years have been couriers, drivers, janitors, artists, and childcare providers.
Meanwhile, according to a recent study, 36% of gig workers have been denied a loan because their profession was considered unsteady.
Then there’s the persistent and disheartening issue of the racial wealth gap. A 2022 study illustrates how the racial gap persists alongside unfair lending practices, even as “the wealth of Black and Hispanic households is increasingly reliant on homeownership.”
In short, there are many who deserve to own a home but don’t meet traditional criteria or are discriminated against. At Quontic, we’re striving to change that.
While the average homeowner is 43 times wealthier than the typical renter, everyone deserves a shot at homeownership and the emotional and financial rewards it can provide.
So what solutions are there? It’s complicated. But we believe one of them is non-traditional mortgage lending.
What Is a Non-Traditional Mortgage Lender?
Short answer: a non-traditional mortgage lender serves borrowers who don’t fit the W-2 mold.
They can be brick-and-mortar banks or online providers like Quontic.
While traditional lenders insist on rigid documentation and processes to make a loan decision, non-traditional lenders use different—and more holistic—criteria.
And before we continue, we want to make it clear that we’re not against traditional mortgage lending. In fact, Quontic also offers traditional mortgages—but more on that later.
For now, the types of borrowers who prefer a non-traditional mortgage loan tend to be:
- Artists
- Business owners
- Contractors
- Drivers
- Entertainers
- Entrepreneurs
- Foreign Nationals
- Freelancers
- Gig workers
- Investors
- Retirees
Do any of those describe you? If so, read on to see what your options are!
Types of Non-Traditional Mortgages
We’re most familiar with the mortgage options we offer, but you’ll find the same or similar with other non-traditional mortgage lenders.
We also want to point out that Quontic is a CDFI, or Community Development Financial Institution. That means we exist to help people gain access to financial services that might otherwise be out of reach—including non-traditional mortgage loans.
So, some assurance: these are not risky or predatory loans. They’re designed to support borrowers who may not qualify for a traditional mortgage loan.
Asset Utilization Loan
You don’t need income if you have adequate cash reserves. As a CDFI, we look at your whole picture, including what you have in cash. If you have an ample amount to make your loan payments, we won’t require employment verification. If that suits you, we encourage you to learn more about our Asset Utilization Loan.
DSCR Loan
Create passive income by investing in real estate. If you aspire to buy your first rental property—or grow your existing portfolio—a Debt-Service Coverage Ratio Loan (DSCR) can do the trick. We consider your credit score and the potential income from the property to inform our loan decision.
DSCR Mixed-Use and Multi-Family Loan
Ideal for real estate with multiple units, or a combo of residential and commercial space. Similar to the above, a DSCR Mixed-Use & Multi-Family Loan empowers you to purchase an investment property. At Quontic, we’re committed to helping you accomplish your investment goals as easily as possible.
Foreign National Loan
If you don’t live or work in the U.S., but want to invest in U.S. property, this is for you. Like all other non-traditional loans we offer, we look at your overall finances while keeping paperwork to a minimum. A Foreign National Loan enables you to invest in hot real estate markets from abroad.
ITIN Loan
No social security number, no problem—consider the Individual Taxpayer Identification Number (ITIN) Loan. It’s an especially good option if you’re not a U.S. citizen, but you live and work in the U.S. No tax returns or W-2 required. If you’re drawn to this loan, you may want to dig deeper in our blog article on homeownership through ITIN loans.
Lite Documentation Home Loan
The name says it all: you don’t need nearly as much to qualify for a Lite Documentation Home Loan as you would a traditional mortgage loan. How much money you made years ago isn’t factored in either. Also, gifts of up to 100% are allowed for down payment and closing costs.
Tread Carefully Around Alternative Mortgage Lending
Alternative mortgage lending and non-traditional lending are not the same.
Yet alternative lending is expanding as the needs of borrowers evolve.
Many of these lenders tend to be online-only and claim they can speed up the path to homeownership. They tout efficiency, convenience, access for underserved communities, and more.
While all of this sounds great, beware that not all lenders have your best interest at heart. In fact, alternative mortgage lenders played a big part in the 2008 foreclosure crisis.
Some potential hazards of alternative mortgage lending include:
- High rates and fees
- Shorter repayment terms
- Lack of service and support
- Limited protections
- Little to no transparency
- Lax regulations
These can have a serious impact on your credit, financial picture, and overall quality of life. Since buying a home is the biggest investment most of us will make, make sure to do your diligence to ensure you’re in good hands.
And you’re certainly in good hands at Quontic.
How Is Quontic Different?
Great question. Here are three things that set us apart to give you peace of mind:
- We’re an FDIC-insured bank and Equal Housing Lender.
- We’re committed to more inclusive lending without compromising safety or responsibility.
- We’re affordable, safe, and accessible while maintaining strict standards.
And remember we mentioned traditional mortgages earlier?
Traditional Meets Non-Traditional at Quontic
We also want to highlight that we specialize in traditional—as well as non-traditional—mortgage loans.
We know that sounds too good to be true. So let us give you the assurance you deserve: we’re a regulated, values-driven bank—in addition to being innovative and adaptable.
Since 2009, our mission has been to increase financial access and break down systemic barriers. We’re invested in helping communities thrive while doing lending and banking better.
We see you as a person first and want to get you the loan that’s best for you.
Ready for a Mortgage as Unique as You Are?
Let’s talk! Or feel free to explore our home mortgage options. We hope to hear from you soon!
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