This BLOG On NON-QM Home Loans For Self Employed Borrowers Was PUBLISHED On February 6th, 2020
There is finally a new loan program out there for successful self employed borrowers that cannot show their income on their tax returns.
- NON-QM Home Loans For Self Employed Borrowers
- Maximum loan limit on non-QM loans for self-employed borrowers is capped at $5 million
- No income tax returns are required
- There is no private mortgage insurance required
There are many home buyers who can benefit from NON-QM Home Loans. The top three types of non-qm mortgage loan programs. We will cover the three main loan programs on this blog.
Bank Statement NON-QM Home Loans For Self Employed Borrowers
The main reason to qualify for bank statement loans for self-employed borrowers is that there is no income tax required.
- Ever since the 2008 Housing And Credit Meltdown, self-employed borrowers had a very difficult time qualifying for home mortgages
- Stated income, no doc, and bank statement loans have disappeared
- Many self-employed and business owners can afford a higher-end home but cannot qualify due to the massive deductions they take
- A large percentage of business owners and/or self-employed wage earners have little to no income after unreimbursed business expenses to show for
Due to this great benefit allowed by self-employed folks, they often miss out on qualifying for home loans.
Bank Statement NON-QM Home Loans
First, most popular non-qm loan program is the Bank Statement Loan.
- This loan is used for self-employed borrowers that have bank statements over the last 12 months
- We can use either business or personal bank statements
- We average bank deposits over the past 12 months
- That average is the income we will use
- We do not care about withdrawals
- Just deposits
Case Scenario On How Bank Statement Loan Program Works
For example, let’s go over a typical case scenario of a self-employed borrower:
- if consumer deposits $10,000 every month into their personal account
- we take the average of the $10,000 deposits of the past 12 months
- income would be $10,000 a month
- we will not look at tax returns
If we looked at tax returns and adjusted gross income might be $50,000 which is $4,333 a month, that will limit how much borrower will qualify:
- Self-employed borrowers can see the power of purchase or refinancing it gives you
- If the borrower decides to use a business account, we will take the average and subtract a 35% expense ratio from the average for business expenses
- That will leave the borrower with a monthly usable income
- Great program for self-employed borrowers
Investor Cash-Flow NON-QM Home Loans
Second is the investor cash flow.
- This loan is the easiest
- It is a very low doc loan
- No income, just assets are used
- All you have to have is a house that you own and live in
- Borrowers can refinance or buy and investment house with no income at all
Call us at Gustan Cho Associates Mortgage Group for more details.
NON-QM Jumbo Mortgages With High Debt To Income Ratio
Third is the Jumbo with high DTI.
- One of the greatest problems higher-end home buyers face is lenders requiring a very low debt to income ratio on Jumbo Loans
- Look no further. Gustan Cho Associates offers High DTI Jumbo Mortgages with a maximum loan limit of $5 million
- No private mortgage insurance required. 5% to 20% down payment required
- Our 95% LTV Jumbo Loan Program is one of our most popular loan programs at Gustan Cho Associates
Down payment requirement depends on borrowers credit scores. Mortgage rates are dependent on down payment and credit scores.
- If you call any bank in the nation they will tell you that the highest DTI you can go to is 43%
- DTI is monthly debt divided by borrowers monthly gross income
- With NON-QM you can go to 55%
As you can see this is a great program. All of these programs have a few great features. Borrowers can have a bankruptcy last week, that’s okay since non-qm loans have no waiting period after bankruptcy…Borrowers can have a foreclosure, short sale, deed in lieu last week, that’s ok. They can have low credit scores that’s ok.
This BLOG On NON-QM Home Loans Was Updated and Published on February 6th, 2020