Non-QM loan
A mortgage that does not meet the federal qualified mortgage rules, often used by self-employed borrowers, investors or people with recent credit events. It allows other ways to document income but usually costs more.
Also called: non-qualified mortgage, non QM, bank statement loan
Related terms
An investment property loan qualified on the rental income the property produces rather than the borrower's personal income. Lenders look at whether rent covers the payment by a set ratio.
The lender's review of your income, assets, credit and the property to decide whether to approve the loan. The underwriter often asks for more documents before issuing final approval.
Your monthly debt payments, including the new housing payment, divided by your gross monthly income. Lenders use it to judge whether you can carry the loan; each loan program sets its own limits.
A loan where payments cover only interest for a set period, so the balance does not go down. After that period, payments jump to include principal or the balance comes due.
A mortgage not insured or guaranteed by a government agency such as FHA, VA or USDA. Most follow Fannie Mae and Freddie Mac rules and require private mortgage insurance when the down payment is under 20%.