Non-Conforming Mortgage Loans And Bank Statement Loans

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Non-Conforming Mortgage Loans And Bank Statement Loans

This BLOG On Non-Conforming Mortgage Loans And Bank Statement Loans For Self Employed Borrowers Was UPDATED On June 21st, 2019

Non-Conforming Mortgage Loans Explained And Defined:

Any mortgage loans that is not conforming to Fannie Mae and/or Freddie Mac mortgage lending guidelines are called non-conforming loans.

  • Jumbo Loans, bridge loans, hard money loans, commercial loans, and Condo Hotel Loans are examples of non-conforming mortgage loans.
  • Non-Conforming Mortgage Loans are often called portfolio mortgage loans
  • This is because lenders who originate and fund non-conforming loans often keep the mortgage loans they originate and fund in their books and do not sell the loans to the secondary market

What Are Non-Conforming Mortgage Loans And Bank Statement Loans

What Are Non-Conforming Mortgage Loans And Bank Statement Loans
Gustan Cho Associates

A non-conforming loan is a loan that fails to meet bank criteria for funding.

Types Of Non-Conforming Mortgage Loans

Types Of Non-Conforming Mortgage Loans
Gustan Cho Associates

Reasons include the loan amount is higher than the conforming loan limit (for mortgage loans), lack of sufficient credit, the unorthodox nature of the use of funds, or the collateral backing it.

  • In many cases, non-conforming loans can be funded by hard money lenders, or private institutions/money
  • A large portion of real-estate loans is qualified as non-conforming
  • This is because either the borrower’s financial status or the property type does not meet bank guidelines
  • Non-conforming loans can be either A-paper or subprime loans

The flexibility of private money can allow for a much wider range of deals to be funded, although more detailed and substantive collateral and documentation may be required by a lender.

Selecting A Non-Conforming Mortgage Lender

Selecting A Non-Conforming Mortgage Lender
Gustan Cho Associates

Borrowers should select non-conforming lenders in the same careful way they would shop for any other loan.

  • Look for good rates and especially a good customer service rating
  • Rates for non-conforming lenders are typically higher than those for banks, but terms are more flexible and loans more easily attainable
  • Many companies advertising non-conforming loans are brokers who refer the loans requests they field to lenders

Types Of Non-Conforming Mortgage Loans

Types Of Non-Conforming Mortgage Loans
Gustan Cho Associates

Commercial non-conforming loans are also known as hard money loans and comprise a large portion of all non-conforming loans.

  • They are used to fund industrial and retail projects like RV parks, theatre complexes, gas stations, medical centers and more
  • Many commercial non-conforming loans are bridge loans

Residential non-conforming loans are strictly regulated, usually with much higher rates than banks. Some states have legal limits against non-conforming loans for residential real estate.

Bank Statement Loans For Self Employed Borrowers

Bank Statement Loans For Self Employed Borrowers
Gustan Cho Associates

Gustan Cho Associates now offers bank statement loans for self-employed borrowers.

  • We have 24 months and 12 months of bank statement mortgage loans for self-employed borrowers.
  • We also have NON-QM Loans for home buyers with no waiting period after bankruptcy and foreclosure. 20% down payment is required
  • There are no maximum loan limits with Non-QM Loans
  • Private mortgage insurance is not required on Non-QM Loans

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