Bank Statement

A bank statement non-QM loan is a mortgage that calculates a borrower’s income using bank statements instead of tax returns and W-2s. This method helps self-employed individuals and others who may struggle to show income through traditional documentation. It’s beneficial for borrowers with substantial tax write-offs or those purchasing a home with lower reported income.

Profit & Loss

A profit and loss (P&L) statement non-QM mortgage, or P&L loan, is a mortgage for self-employed individuals or business owners that evaluates financial viability using a business’s P&L statements. These loans are flexible, accommodating the fluctuations of business income, and are similar to bank statement loans but rely on P&L statements instead.

DSCR (Debt Service Coverage Ratio)

A debt service coverage ratio (DSCR) loan is a non-qualified mortgage (non-QM) that enables real estate investors to qualify based on their property’s cash flow rather than personal income. DSCR loans are popular because they don’t require traditional income verification like tax returns or pay stubs.

Employer Verification of Income

Non-qualified mortgage (non-QM) loans use alternative methods to verify income and employment, making them a good fit for workers whose income includes tips that might not be fully reflected on a W2 or 1099. If an employer logs and verifies this income, it can be counted. Lenders might rely on manual underwriting, reviewing documentation like bank statements, rental receipts, business income, or profit and loss statements to assess a borrower’s ability to repay.

1099

A 1099 non-QM mortgage is a non-qualified mortgage that lets borrowers use their 1099s to prove their ability to repay the loan. It’s designed for those who don’t qualify for traditional home loans, like self-employed individuals, contractors, or retirees. This option is also helpful for people with a major credit event, such as bankruptcy or foreclosure, or those with a debt-to-income ratio over 50%.