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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.

Bank Statement

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)

Construction Loan

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)

Second Mortgage

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

Conforming

FHA

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)

Conventional

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

Jumbo

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

Amortization Type

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

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