Question 1

What is a bank statement loan?

Accepted Answer

A bank statement loan is a mortgage that uses 12-24 months of bank statements to verify income instead of tax returns, ideal for self-employed borrowers.

Question 2

Who qualifies for bank statement loans?

Accepted Answer

Self-employed individuals, business owners, freelancers, and contractors with at least 2 years of self-employment history and a minimum 620 credit score.

Question 3

How much can I borrow with a bank statement loan?

Accepted Answer

Loan amounts up to $3 million are available, with qualification based on your average monthly deposits over 12-24 months.

Question 4

What is a DSCR loan?

Accepted Answer

A DSCR loan qualifies borrowers based on the rental income of the investment property rather than personal income, using the Debt Service Coverage Ratio.

Question 5

What DSCR ratio do I need?

Accepted Answer

Most lenders require a minimum DSCR of 0.75 to 1.25, meaning the rental income should cover at least 75-125% of the mortgage payment.

Question 6

Can I use DSCR loans for multiple properties?

Accepted Answer

Yes, there is no limit to the number of DSCR loans you can have, making them ideal for building a real estate portfolio.

Question 7

What is an asset depletion loan?

Accepted Answer

An asset depletion loan converts your liquid assets into qualifying income by dividing total assets by the loan term in months.

Question 8

What assets qualify for asset depletion?

Accepted Answer

Eligible assets include checking/savings accounts, investment accounts, stocks, bonds, and retirement accounts (typically at 70% value).

Question 9

What is the minimum asset requirement?

Accepted Answer

Most lenders require a minimum of $500,000 in liquid assets for asset depletion qualification.

Question 10

What is the difference between NON-QM and conventional loans?

Accepted Answer

Conventional loans follow strict Fannie Mae/Freddie Mac guidelines with lower rates, while NON-QM loans offer flexible qualification for self-employed, investors, and non-traditional borrowers.

Question 11

Are NON-QM loans more expensive?

Accepted Answer

Yes, NON-QM rates are typically 0.5-2% higher than conventional loans, but they provide access to financing for borrowers who cannot qualify conventionally.

Question 12

Should I choose NON-QM or conventional?

Accepted Answer

If you can qualify for a conventional loan, choose it for lower rates. If your income is complex or you are self-employed, NON-QM may be your best or only option.

Educational Video Library

Featured Videos

What is a Bank Statement Loan? | NS Funding Explains

DSCR Loans Explained: Investment Property Financing | NS Funding

Asset Depletion Loans: Qualify Using Your Wealth | NS Funding

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NON-QM vs Conventional Loans: Which is Right for You? | NS Funding

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