Non-Qualified Mortgage — does not meet CFPB QM safe-harbor underwriting. Allows alternative income documentation.

Are Non-QM rates higher?

Yes — typically 0.50-1.50% above conforming. Trade-off for relaxed documentation.

What credit score is needed?

Usually 700+ for best pricing. Some programs accept 620 with larger down payment.

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Can I refinance to conforming later?

Yes — refinance to conventional once tax returns or W-2 income meets standard QM rules.

Are Non-QM loans risky?

Properly underwritten Non-QM is not high-risk. CFPB ATR (Ability to Repay) still applies — lender must verify repayment ability.

Non-QM Loan Calculator

Non-QM (Non-Qualified Mortgage) loans serve self-employed borrowers, investors, and high-income earners whose tax returns understate income. Rates are 0.50-1.50% higher than QM but qualification uses bank statements, assets, or property cash flow — not W-2s.

Home Price ($)

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Non-QM Rate (%)

Term (years)

Non-QM Type

When Non-QM Makes Sense

Self-employed borrowers whose tax returns aggressively minimise reported income, real estate investors qualifying by rental cash flow rather than personal income, foreign nationals or recent immigrants without 2 years US tax history, and high-net-worth borrowers with assets but low W-2 income (early retirees).

Bank Statement Loan Mechanics

Lender pulls 12-24 months of personal or business bank statements. Calculates qualifying income as average monthly deposits times an expense ratio (50-90% of deposits depending on business type). Service businesses often qualify at higher expense ratios than retail businesses.

Cost vs Conventional

Non-QM rates run 0.50-1.50% higher than conforming. Down payment usually 20-30%. The premium pays for relaxed documentation and broader qualifying methods. Refinance to conforming when tax returns stabilise or assets exceed thresholds.

Non-QM Loan Calculator: 2026 Rate Premium and Down Payment Bands

Use this non-QM loan calculator with realistic 2026 numbers — quoted ranges below reflect lender pricing sheets from Angel Oak, Deephaven, Lending Bee, and Newfi as of June 2026. Bank-statement loan (12-month): rate premium 0.75-1.25% above conforming, minimum 20% down, FICO 680+, 24-month proof of self-employment. Bank-statement loan (24-month): rate premium 0.50-1.00%, 15% down possible above 720 FICO. Asset-depletion / asset-based: rate premium 1.00-1.75%, 25-30% down, 700+ FICO, qualifying assets divided by 60-84 months for income calc. DSCR (investor cash flow): rate premium 1.25-2.00%, 25% down minimum, qualifying based on rent ÷ PITI ≥ 1.0 (best pricing at 1.25+). Foreign national / ITIN: rate premium 1.50-2.50%, 30-40% down. Per the CFPB Regulation Z Ability-to-Repay rule, every non-QM lender must still document ability to repay — relaxed documentation is not no documentation. Updated 2026-06-29.

Non-QM Loan Calculator: When to Refinance Back to Conventional

The most common non-QM trap is paying the premium rate forever because borrowers forget to refinance once they're eligible for conforming. Re-evaluate every 6-12 months: (1) If you now have 2 years of stable tax returns showing qualifying income, you can refinance to conventional and save 0.50-1.50% in rate, which on a $500,000 loan is $250-$750/month. (2) If your bank-statement business income has stabilized and shows on tax returns post a 12-month seasoning, conforming becomes available. (3) If a foreign-national borrower obtains a SSN/ITIN plus 2 years of US credit + employment, switch to conforming. (4) DSCR investor: stay on DSCR — conventional won't qualify a rental on rent-only income. Run break-even on closing costs (typically $3-6K) divided by the monthly rate savings — most refis pay back in 6-10 months. Source: Fannie Mae Selling Guide B3-3 + Freddie Mac Single-Family Guide.

Source: Non-QM lender guidelines (Angel Oak, Deephaven, Lending Bee, Newfi); CFPB Reg Z ATR rule; Fannie Mae + Freddie Mac selling guides.