Qualifying For A Jumbo Mortgage With No Tax Returns

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Qualifying For A Jumbo Mortgage With No Tax Returns

This BLOG On Qualifying For A Jumbo Mortgage With No Tax Returns Was UPDATED On April 16th, 2019

By Gustan Cho

A conforming mortgage loan is any residential mortgage loan that conforms to Fannie Mae and Freddie Mac mortgage guidelines.
  • Both Fannie Mae and Freddie Mac have maximum mortgage lending limit of $484,350 unless the property is in a high-cost area.
  • Any loan limit higher than $453,100 is called non-conforming loans or Jumbo Mortgages
  • Qualifying For A Jumbo Mortgage with no income tax returns is possible with our non-qm jumbo mortgages for self-employed borrowers
  • 24 months of bank statement deposits are averaged and that monthly average is used as borrowers monthly income
  • 10% to 20% down payment is required
  • The down payment requirement depends on borrowers credit scores
  • Up to 50% debt to income ratios is allowed with compensating factors
  • There is no private mortgage insurance required with non-qm jumbo mortgages for self-employed borrowers

In this blog, we will do a comparison of non-qm mortgages for self-employed borrowers versus traditional jumbo loans. One major difference in qualifying for non-qm jumbo mortgages for self-employed borrowers is that traditional jumbo lenders require 700 credit scores where non-qm lenders only require 620 credit scores. 

What Are Jumbo Loans

Any mortgage loan that exceeds the conforming loan limit of $453,100 is called a non-conforming loan or Jumbo Loan:

  • A Jumbo Home Mortgage loan exceeds the conforming lending limit set by Fannie Mae and Freddie Mac
  • Fannie Mae and Freddie Mac purchases mortgages originated by lenders in the United States
  • In order for them to purchase loans from private lenders, the mortgage loans need to conform to their lending guidelines

Qualifying For A Jumbo Mortgage And Its Requirements

Jumbo lending requirements depend on the individual
  • Jumbo lenders generally are much tougher than any other mortgage loan programs
  • Jumbo lenders normally require the following
    • much higher credit scores
    • higher down payment requirements
    • reserve requirement
    • often have higher closing costs and higher interest rates than conventional loan programs

How Lenders View Risk On Borrowers Qualifying For A Jumbo Mortgage

Jumbo Mortgages are considered high risk.
  • Jumbo Mortgages are loans on higher-end homes
  • If a Jumbo home lender defaults on their Jumbo Mortgages, it may take some time for the lender to liquidate the property
  • Higher end homes generally take longer to sell
  • This is the case since they are normally custom homes than tract homes

Risk Versus Rewards Of Traditional Jumbo Lenders

Jumbo Lenders need to offset this risk by counting that they have a strong borrower with a good payment history and higher credit scores and high income.
  • High credit scores and strong payment history proves that the borrower is financially responsible
  • High income and job longevity proves that the borrower will not have any problems in paying his or her Jumbo Mortgage payments in the future
  • Jumbo Mortgage lenders are not real estate investors
  • They do not want the high-end property
  • They just want Borrowers to make good on their Jumbo mortgage loan payments
  • Jumbo Mortgage Lenders normally require a minimum credit score of 700
  • Debt to income ratio of 40% is normally required by a traditional jumbo lender
  • Higher credit scores, higher down payments, and lower debt to income ratios make lenders feel secure on borrowers making payments without any strain every month

Qualifying For A Jumbo Mortgage With Late Payments

Jumbo lenders frown on late payments and most lenders with want to see timely payments in the past 24 months.
  • Traditional Jumbo mortgage lenders normally frown on gaps in employment
  • They want to see borrowers has been in the same job for the past 24 months
  • They also want to see borrowers in the same line of work for the past 4 years or more
  • Prior bankruptcy and foreclosure is normally frowned upon
  • Most Jumbo mortgage lenders will not lend to anyone who had a bankruptcy or foreclosure in the past 7 years and some will go as far back as 10 years

Non-QM Jumbo Lenders are totally different. There is no waiting period after housing event and/or bankruptcy. Late payments are allowed. Credit Scores down to 620. Debt to income ratios up to 50% DTI with compensating factors.

Down Payment Requirements In Qualifying For A Jumbo Mortgage

Most traditional jumbo mortgage lenders require a minimum of 20% down payment on a home purchase.
  • To get the best available mortgage rates, borrowers should plan on having a 25% down payment and a 740 credit score with a maximum debt to income ratio of 40%
  • Jumbo lenders also want to see borrowers with at least a one-year cash reserve that covers principal, interest, taxes, and insurance and a strong financial statement
  • Non-QM Jumbo Mortgage Lenders require 10% to 20% down payment
  • Down payment requirement depends on borrowers credit scores

Qualifying For A Jumbo Mortgage: Types Of Jumbo Loan Programs

Jumbo Mortgage loans are mainly for primary owner occupant homes.

  • There are a few portfolio Jumbo mortgage lenders that will do second home Jumbo mortgage loans
  • Borrowers need to have extreme strong financials which consist of  the following:
    • high credit scores
    • strong income
    • strong assets
    • reserves
    • strong solid compensating factors

10% Down Payment, 90% Loan To Value, No Mortgage Insurance Jumbo Mortgage Loan Program

I can offer qualified high-end home buyers a special 10% down payment, 90% loan to value, with no mortgage insurance NON-QM Jumbo mortgages for self-employed borrowers:

  • However, the Jumbo mortgage loan borrower needs to be a strong borrower
  • Minimum credit score required is 620
  • Maximum debt to income ratio needs to be no greater than 50%
  • Interest rates on the 10% down payment Jumbo mortgage loan program is slightly higher than the 20% down payment
  • No private mortgage insurance required
  • No income tax returns required

High-end home buyers who need to qualify for non-qm jumbo mortgages for self-employed borrowers can contact us at Gustan Cho Associates at 262-716-8151 or text us for faster response. 10% to 20% down payment on purchase with no loan limit. There is no private mortgage insurance required. Minimum credit scores required is 620. Down payment requirement depends on borrowers credit scores. There is no waiting period after foreclosure, deed in lieu of foreclosure, short sale to qualify for non-qm jumbo mortgages. No income tax returns are required. We go off by the average of 24 months bank statement deposits.

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