Non-Conforming Mortgage Loans And Bank Statement Loans

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This BLOG On Non-Conforming Mortgage Loans And Bank Statement Loans For Self Employed Borrowers Was UPDATED And PUBLISHED On September 9th, 2020

Non-Conforming Mortgage Loans Explained And Defined:

Any mortgage loans that are 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

In this article, we will discuss and cover Non-Conforming Mortgage Loans And Bank Statement Loans.

What Are Non-Conforming Mortgage Loans And Bank Statement Loans

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

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 Lender

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 Mortgage Loans

Types Of Non-Conforming Mortgage Loans

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 nonconforming loans for residential real estate.

Bank Statement Loans For Self Employed Borrowers

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
  • A 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

To qualify for nonconforming and/or alternative financing mortgages, please contact us at Gustan Cho Associates at 262-716-8151 or text us for a faster response. Or email us at gcho@gustancho.com. The team at GCA Mortgage Group is available 7 days a week, evenings, weekends, and holidays.

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