Non Qualified Mortgage

Know Your Loans

Non-QM loans or a non-qualified mortgage, in short, are loans that do not fit conforming qualified mortgage guidelines. This can be due to the following:

  • FICO Too Low

  • Loan Amount above Lending Limits

  • Income Documentation not Available

  • Etc.

NOTE: Regardless of LTV, Non-QM loans will never require mortgage insurance.

Common examples include bank statements or using your assets as income. Because of the more flexible qualification requirements, Non-QM loans open up real estate investment opportunities to a broader group of individuals. You can buy a property to do long term rental or even a short term rental like Airbnb, Vrbo etc.


Jumbo Loan

A jumbo loan is a type of financing that exceeds the limits set by the Federal Housing Finance Agency and cannot be purchased, guaranteed, or securitized by Fannie Mae or Freddie Mac.



Bank Statement Loans

Bank Statement loans are geared specifically to business owners/self-employed individuals. So, instead of using W2's, tax Returns, etc. we can help a self-employed person, who has been so for at least 24 months, using their bank statements. This program is suitable in the event your tax returns do not accurately support the income you are generating.

We would collect 12 or 24 months worth of bank statements and do an analysis of the statements. Once the analysis is done, that figure is what is used for the borrowers monthly income.

DSCR Loans

DSCR (Debt Service Coverage Ratio) is a Non-QM loan specifically for investment properties. Debt Service Coverage Ratio Loans allow borrowers to qualify for financing based on the cash flow generated by a rental or investment property.

Asset-Based Loans

Asset-based loans allow you to leverage assets you already have, including checking and saving accounts, investment accounts, or money market accounts to secure a loan.

Equity Solution HELOAN

If you want to take cash out from your Single Family Primary residence or Second home or Investment property, We have both QM and non QM solution just for you. You can do the second lien in combination with any kind of loan based on your need. This option can be cheaper in some cases. For details, please contact me.

Common Qualification Documents (Varies from Loan to Loan)

  • ID

  • Business Bank Statement 12-24 Months

  • last 2 months Personal Bank Statements

  • Purchase Agreement

  • Corporate Agreement

  • Reserve Capital 6-12 months

Non QM Benefits

Since many first-time borrowers are only aware of QM loans, it can seem like investing or becoming a first-time buyer is an impossible feat. However, that isn’t the case. Non-QM loans are a credible and viable option for many borrowers.

Non-QM loans are favorable to borrowers for many reasons, including:

  • Greater underwriting flexibility

  • No personal income calculations are required

  • No job history is required (in some cases)

  • As little as 10% down required

  • No reserves required (in some cases)

  • Credit scores as low as 620 allowed (580 w/ compensating factors)

  • Low debt-service-coverage ratio (DSCR) on investment properties

  • Counting rental income (including Airbnb & VRBO)

For many potential homeowners and real estate investors, Non-QM loans are the only way to make investment opportunities plausible. As you well know, real estate opportunities don’t always linger on the market for long. A Non-QM mortgage can make it possible to make a timely purchase.


Non QM Risks

The primary risk of a Non-QM mortgage is not being able to pay back the loan should your financial circumstances drastically change. This is particularly of concern if there is another economic recession. However, defaulting on any loan is always a risk.

However, by maintaining reasonable lending standards while preserving flexibility, Non-QM loans offer a middle ground for borrowers who would otherwise have no options or be saddled with unreasonably high-interest rates that drastically increase the expense of the loan.