Compare Mortgage Products
Hard Money and Non-QM
Hard Money Loan
A “hard money” loan is any loan offered by a private lender that is secured by an asset, usually real estate.
- Does not conform to Fannie Mae or Freddie Mac guidelines.
- Interest rates are higher than conventional or non-QM.
- LTV up to 70 (30% down) with few exceptions.
- Usually income verification is not required.
- FICO may or may not be required depending on LTV.
- Gift funds are allowed.
- Very little personal documents or information is required.
- Different private lenders will make exceptions on a case by case basis.
Debt Service Coverage Ratio (DSCR)
A DSCR loan is a non-QM loan meant for investment properties and allows rental income to qualify in lieu of income verification.
- Must own a primary home.
- Rates in between conventional and hard money loans.
- Up to 85 LTV if borrower owns another investment property, up to 70 LTV if not.
- Rental sheet from property being purchased or rental income estimate required.
- Does not require income verification.
- Options that do not require FICO score
- Ideal for foreign nationals.
Individual Tax Identification Number (ITIN)
An ITIN loan is another non-QM option. It is suited for those who may be in the United States on a visa and have income but not a Social Security Card.
- Requires only ITIN for identification.
- Up to 90 LTV (10% down).
- Income required, calculated from tax returns.
- 1 year employment required.
- Full doc or Profit and Loss statement (P&L).
- Ideal for visa holders and others with no Social Security Card.
- No FICO score required.
A type of “Alt-doc” loan. Qualification is based on income documented through bank statement deposits rather than employment verification.
- Conventional and Non-QM options available
- Rates nearly as low or as low as W2 income qualification
- Ideal for self-employed
- May require P&L statement from Certified Public Accountant (CPA)
Meant to build a residential or commercial structure. There are many types of construction loans for various situations. Some have many restrictions.
- Hard money construction loan often best option due to ease and speed of obtaining
- Hard money 70-80 LTV, (20-30% down)
- Non-QM up to 90% of After Repair Value (ARV) (10% or more down)
- FHA One-Time Close construction loans
- Available (many restrictions)
A second mortgage is a second note that goes onto the deed along with the primary loan or first mortgage.
- Usually higher interest rate than first mortgage.
- Useful to avoid a jumbo loan with a higher interest rate when loan amount is just over conforming county limit
- Usually up to 90 CLTV.
- Income usually not required
- FICO in the mid 600s usually required
Meant for borrowers with lower income and first time homebuyers, FHA loans allow a smaller down payment and higher DTI.
- As high as 96.5 LTV (3.5% down)
- Back-end DTI up to 57%
- Harder to get offer accepted, listing agents prefer hard money then conventional
- FHA 203k Renovation loan, finance up to $35k for renovation or rehabilitation (rehab)
Most common loan type, usually with the lowest interest rate.
- Must conform to all Fannie Mae and Freddie Mac guidelines
- Loan amount must not exceed county conforming loan limit
- Up to 95 LTV (5% down).
- 15-45 days to close depending on lender
- Requires employment verification
- Self-employed borrowers can verify income with Federal Tax Returns
Similar to conventional but with loan amount exceeding county conforming limit.
- Very common in California
- As high as 90 LTV (10% down)
- DTI up to 39 front-end and 45 back-end
- Up to $3M loan amount or more
- Higher interest rate than conventional
- No mortgage insurance with high FICO
Fixed Rate Mortgage
- Monthly Principal/Interest payment stays the same for the life of the loan.
- Usually allows the borrower to pay the least amount of interest over the life of the loan.
- Most non-QM and conventional loans are fixed rate.
Adjustable Rate Mortgage (ARM)
- Interest rate adjusts on a predefined schedule tied to variable index rate.
- Often allows lower interest rate in the short term
- Suitable for those who want a lower monthly payment for 3-5 years and may plan to refinance within that period before or shortly after rate starts adjusting
Interest Only Mortgage
- Borrower does not pay down principal loan amount during the life of the loan
- Nonconforming (conventional guidelines do not allow interest only)
- Most hard money and construction loans are interest only
- Many non-QM interest only options including 40 year term mortgages