Best Non QM Mortgage Lenders

Jump straight to it: The best non-QM mortgage lender is CrossCountry Mortgage.

Not all buyers have an easy time qualifying for a conventional mortgage. Many people who are self-employed, have less-than-stellar credit or are buying very expensive homes will not meet the criteria of normal lenders. But people who fall into these categories and want to buy a home have options.

Non-qualifying mortgage (non-QM) loans are offered by mortgage lenders across the country. If you have had difficulties obtaining financing in the past, these nontraditional mortgages may be just what you need to fulfill your dream of homeownership.

Quick Look: Best Non-QM Mortgage Lenders

• Best for Flexible Mortgage Options: Angel Oak Mortgage Solutions
• Best for Refinancing: New American Funding
• Best for Non-Conforming Loans: North American Savings Bank
• Best for Self-Employed Borrowers: CrossCountry Mortgage
• Optimal for Online Mortgages: Rocket Mortgage (formerly Quicken Loans)

Non-QM mortgage lenders are not as hard to come by as you might think, but picking the right financial partner for your situation is always key. These loans are also not regulated by government entities like Fannie Mae and Freddie Mac, so it’s important to find a legitimate lender with a reputation for carrying out these more complex loan programs.

Below, you will find five lenders that either specialize in or have extensive experience issuing non-QM loans, along with information to help determine whether they could be viable partners for your next loan.

1. Best for Flexible Mortgage Options: Angel Oak Mortgage Solutions

Angel Oak Mortgage Solutions is a nationwide lender, and while it offers conventional loans, it specializes in non-QM lending. With four main non-QM options, Angel Oak offers competitive rates and legitimacy as a lender for people who are not able to get a conventional loan.

Angel Oak’s bank statement loan is relatively self-explanatory in that it allows borrowers to use their assets to qualify for the loan rather than employment verification. This loan is made for self-employed buyers because in conventional financing typically proof of income is needed.

Investing in real estate is also tricky when it comes to financing, and Angel Oak offers a program for people looking to purchase income-producing property by using the proposed cash flow the asset will generate. If you have had a recent bankruptcy or foreclosure, Angel Oak also offers an option to avoid the typical waiting period and get you back into home ownership sooner rather than later.

The final type of borrower Angel Oak’s non-QM program can help is someone seeking a jumbo loan. These large loan amounts are not allowed under conventional financing, but Angel Oak offers loans up to $3.5 million.

2. Best for Refinancing: New American Funding

Like Angel Oak, New American Funding offers non-QM loan programs for people who are self-employed, seeking a jumbo loan or who have some atypical credit issues. New American also advertises non-QM loans for very well-qualified borrowers (also known as prime borrowers) who might want to take advantage of unique financing, like an interest-only loan.

The maximum loan amount for New American is $2.5 million, and the maximum cash-out amount is $500,000, so if you are seeking a jumbo loan refinance then it might be a good partner. With programs supporting Latinx, Black and military borrowing efforts as well as physical branches in 33 states, New American can be worth considering for any type of non-QM loan. 

3. Best for Non-Conforming Loans: North American Savings Bank

Based in Kansas City but lending across most of the U.S., North American Savings Bank (NASB) has closed on 100,000 mortgages since 2010, accounting for $30 billion loaned. With vast lending experience, NASB is a solid financial partner for most borrowers, but it claims it has no cookie-cutter loans, and it shows in its different non-QM options.

NASB advertises 11 types of non-QM loans, including beneficial options for self-employed borrowers, borrowers with past financial mistakes on their records, investors, smaller down payments and bridge loans. If you have a complex borrowing situation, NASB may be worth a call. NASB only has physical locations in the Kansas City area, so if you are not in the Midwest and would like to meet with someone face-to-face, another lender might be best. 

4. Best for Self-Employed Borrowers: CrossCountry Mortgage

Based in Cleveland and approved to lend in all 50 states, CrossCountry Mortgage is a top home lender in the U.S., offering borrowers peace of mind in dealing with a reputable company. Like other lenders mentioned here, CrossCountry offers home loans based on bank statements, loans using assets to qualify and loans for investors that can help people who fall into the non-QM category.

CrossCountry also offers loans for foreign nationals, which is a more rare type of non-QM loan because many of these borrowers don’t have a credit score. With branches across the country and easy online options, CrossCountry makes its loan process as straightforward as possible, and quotes can be obtained quickly via its website. 

5. Optimal for Online Mortgages: Rocket Mortgage (formerly Quicken Loans)

Of all the lenders listed, Rocket Mortgage (formerly known as Quicken Loans) is likely the one you’re most familiar with. As the nation’s largest online home lender, Rocket Mortgage offers a range of loan types, an intuitive application process and a comprehensive educational section. Most borrowers will receive a decision instantly after finishing and submitting their applications. 

Rocket prides itself on having the easiest online process in the business, allowing borrowers to apply 100% via the company website. While Rocket Mortgage offers non-QM options, the minimum qualification requirements for a home loan are a little higher than competitors, so its offerings might not be for every borrower.

What Are Non-QM Mortgage Loans?

Non-QM (non-qualified mortgage) loans are a type of mortgage loan that does not meet the standards set by government-sponsored enterprises such as Fannie Mae and Freddie Mac. These loans are designed for borrowers who may not meet the strict requirements of traditional mortgage loans, such as self-employed individuals or those with non-traditional income sources.

Non-QM loans provide an alternative option for these borrowers by considering factors like their credit history, assets, and cash flow, rather than solely relying on their debt-to-income ratio. These loans often have higher interest rates and require larger down payments, but they can be a valuable option for individuals who do not qualify for conventional mortgage loans.

Types of Non-QM Mortgage Loans

There are multiple types of non-QM mortgage loans just like there are multiple types of government-backed mortgage loan options. The following are a few of the most common non-QM financing options you might see as you shop. 

Bank Statement Loans

Instead of supplying your lender with tax returns, proof of income and W2s, a bank statement loan uses your monthly bank statements to prove your income. These are ideal for self-employed borrowers, who typically don’t have pay stubs to prove their income. 

Asset-Based Loans

Asset-based loans use something other than (or in addition to) cash as collateral for the loan. If someone owns a business, they can use the property of the business to help them qualify for their mortgage.

DSCR Loans

Debt service coverage ratio (DSCR) loans are best for borrowers who are looking to purchase investment properties. These loans work by determining how much money the property stands to make from rental income and uses that amount to qualify for the loan program.

Advantages

Just because you may not qualify for a typical loan does not mean a non-QM loan is a bad thing. In the right circumstance, non-QM loans have great advantages, including:

• Investment property use: Non-QM loans make investing in real estate possible. DSCR loans allow investors to unlock more buying power by factoring in the income the asset can produce.
• Credit recovery: In many instances, people with bankruptcies or foreclosures can obtain financing through non-QM loans when typical loans wouldn’t have been possible. So long as you make your payments on schedule, your credit score will likely improve as you pay down your balance. 
• Self-employed borrower advantage: Even if you run a very successful business, you might not qualify for conventional financing. Non-QM loans allow business owners to borrow at competitive rates by considering assets and nontraditional income sources. 

Considerations

As with any loan, non-QM mortgages are not for all borrowers. Here are a few things to consider when determining whether you should pursue a non-QM loan.

• Lender’s reputation: Because non-QM loans don’t fall under governmental regulation by Fannie Mae and Freddie Mac, make sure you are using a reputable lender with experience dealing specifically with the type of loan you’re looking for. 
• Different terms: Depending on the type of non-QM loan you are seeking, you might only be able to access certain rates, loan durations and fees. Review each lender’s terms before choosing where you want to finance your loan. 
• Buying power: Non-QM loans can be riskier for the borrower and the lender. Just because you can borrow after a foreclosure, or after a good year for your business, does not always mean you should.

Frequently Asked Questions