Requirements for Non-QM Loan Qualification

Today’s homebuyers have increasingly diverse financial profiles that don’t always fit the requirements of conventional and government mortgages. Let’s take a look at some of the different requirements for Non-QM loans. You might be surprised which niche you fall into and the benefits these loans offer.

Loans for the Self-Employed

A Simple Access^® Non-QM Bank Statement loan from Luxury Mortgage is tailored to the needs of borrowers with non-traditional income streams. Qualifying for this type of loan often requires nothing more than showing the deposits in one’s personal or business bank account, with no W-2s or tax returns needed.

As you can probably guess from the product’s name, a Non-QM 1099 Only loan needs only the potential borrower’s 1099 IRS forms. This type of loan caters to those who work for themselves as freelancers, independent contractors, gig economy workers, or people who own small businesses. While often financially able to afford mortgage payments, these folks may not get approved for traditional home loans, and so the 1099 Only loan relies on 1099 earning statements for qualification.

Assets-Based Qualification

It’s sometimes the case that a potential borrower has enough assets to be a low risk for a lender, but that borrower doesn’t have the documentable income that many mortgage products. And so Luxury Mortgage offers Asset Qualifier loans that base qualification on liquid assets, and other assets that can be liquidated. These assets could be real estate, investments such as stocks, money market funds, trust accounts, money in bank accounts, cash-out settlements, and more. With a Simple Access® Non-QM Asset Qualifier loan, there’s no need for income documentation or employment verification.

Loans for Investors

Real estate investors often don’t have the standard income profiles. So, rather than basing qualification on employment documentation or other traditional income, Investor Cash Flow loans look at the potential rental income that an investment property will generate. That means no employment verification is needed, and the borrower’s debt-to-income ratio need not be taken into consideration. This loan is specifically for investors – owner occupied properties don’t qualify.

For the Diversified Borrower

As diverse borrowers often have diverse ways of earning money, Non-QM Full Documentation loans take a wider approach to qualification. Here, income verification plays a part, with two years of W-2s required, as well as other factors. These other considerations could include tax returns, pay stubs, bank statements, investment accounts, veteran benefits statements, and more. In essence, a Full Documentation loan will look at a variety of documented proof of the borrower’s creditworthiness.

So which Non-QM category do you fit into? Contact us today to speak with a loan originator about which mortgage product may fit your needs.