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 28, 2017

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 because mortgage 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

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

Types Of Non-Conforming Mortgage Loans

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 are qualified as non-conforming 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.

Private Money 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

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

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

The Gustan Cho Team now offers bank statement loans for self employed borrowers.

  • We have 24 months and 12 months 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.
The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

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