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Non-Qualified Mortgages (Non-QM) are home loans that don’t meet the strict requirements of traditional, government-backed mortgages. They're designed for creditworthy borrowers who may have unconventional income, unique financial profiles, or are investing in real estate. Non-QM loans offer flexible underwriting and are often the best option for self-employed individuals, investors, or foreign nationals.
Bank Statement Loans
These loans are ideal for self-employed borrowers who don't have consistent W-2 income or whose tax returns don’t reflect their true earning power. Instead of traditional income documentation, lenders use 12 to 24 months of personal or business bank statements to verify income. This approach provides a more accurate view of actual cash flow for entrepreneurs and freelancers.
Asset Depletion/Utilization
For high-net-worth individuals with substantial savings or investment portfolios but limited income, asset depletion loans offer a smart alternative. Lenders calculate a hypothetical monthly income from the borrower’s assets—such as retirement accounts, brokerage funds, or savings—by dividing total assets over a fixed term (typically 60 to 120 months), allowing qualification without regular employment income.
Debt Service Coverage Ratio (DSCR) Loans
DSCR loans are designed for real estate investors who want to qualify based on property cash flow rather than personal income. The DSCR compares rental income to the mortgage payment. A DSCR of 1.0 or higher means the property covers its debt obligations, making it easier for investors to qualify, even if they own multiple properties or have complex financials.
Foreign National Loans
These loans are available to non-U.S. citizens looking to purchase or invest in U.S. real estate. Lenders often require a valid visa or passport, proof of foreign income or assets, and a U.S. bank account. No U.S. credit history is required, and documentation is usually simplified compared to traditional loans.
Jumbo Non-QM Loans
For borrowers seeking high-value properties that exceed conforming loan limits, Jumbo Non-QM loans offer a solution. These loans provide larger loan amounts with more flexible guidelines around credit, income, and documentation. They’re often used by affluent borrowers with complex financial profiles.
Non-QM loans provide flexible, alternative financing for borrowers who fall outside the box of traditional lending. Whether you’re self-employed, a real estate investor, or a foreign national, Non-QM products open the door to homeownership and investment opportunities without sacrificing credit quality or reliability.
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