If you’ve struggled to qualify for a traditional mortgage, Non-QM (Non-Qualified Mortgage) loans could be the answer you’ve been looking for. Non-QM loans offer flexibility, allowing borrowers who don’t fit the standard requirements to still achieve homeownership. These loans are perfect for self-employed individuals, real estate investors, and anyone who needs a more customized approach to their home financing.

What Are Non-QM Loans?

Unlike traditional loans, Non-QM loans don’t have to meet the strict guidelines set by the Qualified Mortgage (QM) rule. This means greater flexibility when it comes to credit score, income verification, and debt-to-income (DTI) ratios. Non-QM loans are designed to help buyers who may not have a traditional W-2 income, like self-employedindividuals, or those with unique financial situations.

Requirements:

• Self-Employed or Freelance income (no W-2 required)
• Minimum 2 years of business history (for most lenders)
• Good credit score (usually 600+)
• Adequate cash reserves (varies by lender)

Documents Needed:

• 12-24 months of business or personal bank statements (used to verify income)
• Proof of identity (e.g., driver’s license or passport)
• Credit report (lender will pull this)

A DSCR (Debt-Service Coverage Ratio) Loan is designed for real estate investors and allows you to qualify based on the rental income your property generates, rather than your personal income. Here's a simple breakdown:

Requirements:

• Real Estate Investor (must own or plan to purchase rental properties)
• Minimum DSCR of 1.0 (your rental income must cover your mortgage payments)
• Credit score (usually 620+)
• Down payment (typically 20%-30%, depending on the property type)

Documents Needed:

• Property rental income documentation (lease agreements or rent rolls)
• Credit report (lender will pull this)
• Proof of identity (e.g., driver’s license or passport)
• Property details (for appraisal and valuation)

This loan option is great for investors who want to leverage their rental properties to qualify for financing, with no need for traditional income documentation. If your property can pay for itself, you could be on your way to securing your next investment!

A Jumbo Loan is a type of mortgage that exceeds the conventional loan limits set by the Federal Housing Finance Agency (FHFA), allowing you to finance high-value properties without the restrictions of standard loan limits. Here’s a quick breakdown:

Requirements:

• Property value exceeds conforming loan limits (varies by county)
• Strong credit score (typically 680+)
• Stable income (evidence of ability to repay, such as tax returns or bank statements)
• Higher down payment (usually 20% or more)
• Low debt-to-income (DTI) ratio (typically under 43%)

Documents Needed:

• Proof of income (tax returns, pay stubs, or bank statements)
• Credit report (lender will pull this)
• Property details (appraisal and valuation)
• Proof of identity (e.g., driver’s license or passport)
• Asset documentation (for down payment and reserves)

Jumbo loans are perfect for buyers looking to purchase luxury homes or properties in high-cost areas. While the requirements are a bit more stringent, these loans allow you to secure financing for homes that go beyond standard loan limits.