Non-QM Loans
Flexible Income Verification
Qualify using bank statements, 1099s, or P&L statements.
Typical Down Payment
Typically 10–20%, depending on credit and property type.
Recent Credit Events
May allow approval even after a recent bankruptcy, foreclosure, or short sale.
Property Types Options
Eligible for primary, second home, or investment properties.
What is a Non-QM Loan?
A Non-Qualified Mortgage (Non-QM) loan is designed for borrowers who can afford a home but don’t meet the strict income documentation or underwriting standards of conventional or government-backed mortgages. These loans are especially helpful for self-employed individuals, independent contractors, and investors whose income may not show clearly on tax returns.
Instead of relying solely on W-2s or pay stubs, Non-QM lenders take a more flexible approach—reviewing alternative income documentation such as bank statements, 1099 forms, or profit-and-loss statements to determine your ability to repay the loan.
Why Choose a Non-QM Loan?
Non-QM loans provide freedom and flexibility for qualified borrowers with unique financial profiles. They’re ideal for self-employed professionals, business owners, and real estate investors who have steady income but non-traditional documentation. These loans can also help borrowers recovering from recent credit events—like bankruptcy or foreclosure—get back on the path to homeownership sooner.
With a Non-QM loan, the focus is on financial reality, not just paperwork. Lenders evaluate your full financial picture, including assets, cash flow, and credit history, to craft a solution that makes sense for your situation.
Alternative Income Documentation Options
For self-employed individuals, proving income isn’t always straightforward. Non-QM lenders—especially those offering Bank Statement Mortgages—accept a variety of documentation to verify income and ensure your loan is tailored to your financial profile.
Business or Personal Bank Statements
Borrowers can provide 12 or 24 months of business or personal bank statements. Lenders review your qualified deposits and apply an expense factor to calculate how much income you can use to qualify.
1099 Income Documentation
Self-employed borrowers who receive 1099s can qualify based on one to two years of 1099 income. Lenders generally apply a 10% expense ratio, meaning you’re qualified on 90% of your total income to account for business expenses.
Profit & Loss (P&L) Statements
Some small business owners may submit a P&L statement to more accurately reflect their income. This helps lenders understand business health, revenue trends, and expenses over time, ensuring a clearer picture of repayment ability.
Remote Work Office
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Who Qualifies for a Conventional Loan?
To qualify, borrowers typically need:
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A credit score of at least 620.
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Stable employment and verifiable income.
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A reasonable debt-to-income (DTI) ratio.
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A down payment (as low as 3%, though 20% avoids PMI).
Lenders may also look at financial reserves and your history of responsible credit use.
FAQ
Who should consider a Non-QM loan?
Borrowers with non-traditional income—such as self-employed professionals, business owners, or independent contractors—are ideal candidates.
Are Non-QM loans only for self-employed borrowers?
No. They also serve real estate investors, retirees with high assets but limited income, and borrowers recovering from credit events.
Can I qualify for a Non-QM loan if I’ve had a recent bankruptcy?
Yes. Many Non-QM programs allow borrowers to qualify sooner than traditional mortgage timelines require.
Do Non-QM loans have higher interest rates?
Rates can be slightly higher than conventional loans because they carry more flexible guidelines—but the difference often pays off for borrowers who wouldn’t otherwise qualify.
Ready to Explore Your Options?
With over 20 years of experience, Rodrigo Ballon and CrossCountry Mortgage specialize in Non-QM financing for self-employed and non-traditional borrowers. Whether you earn income through your business, 1099 work, or investments, our team will help you find the right loan structure to fit your financial reality.
Ready to explore your Non-QM options? Let’s find the mortgage that fits your income and goals.