Self-employed borrowers run into the same wall over and over again: they don’t qualify for a conventional loan. As a self-employed borrower, you know what we are talking about. This is exactly how our non-QM home equity loans work.
Scenario: $1,000,000 Pulled From Equity
Borrower Profile:
- 748 FICO
- Self-employed for 19 years
- Primary residence valued at $2,900,000
- Existing first mortgage: $740,000 (low rate, borrower wants to keep it)
- Goal: Access $1,000,000 to invest in a business
The Non-QM Solution: Closed-End Second Mortgage (Bank Statement Program)
- 12 months of bank statements to calculate income
- No need to refinance the first mortgage
- No disruption to the borrower’s existing low interest rate
The Outcome
- $1,000,000 cash out approved
- First mortgage stays in place
- Business expansion funded
- Income evaluated based on real cash flow
Closed-End Second vs Conventional HELOC
Closed-End Second Mortgage (Non-QM):
- Fixed loan amount (lump sum)
- Stable structure for large investments
- Easier qualification using bank statements
HELOC:
- Revolving line of credit
- Typically stricter income documentation
- Often harder for self-employed borrowers to qualify
If you’re self-employed and sitting on equity, there’s a strong chance we can structure something similar for you. Contact our office for more information about how non-QM loan programs can pull equity from your properties.
