What is a Second Home Loan?

A second mortgage loan is called a junior lien in second position behind your first mortgage.

Most banks and lenders want to see stable and verifiable income which can be difficult when you don’t receive a W-2 paycheck. If you deduct a lot of business expenses, your taxable income may look lower than what you actually earn. This can make it harder to qualify for a second mortgage using traditional methods.


We offer solutions for borrowers who fit this demographic. Explore our flexible second loan programs below.

These non-QM second loans are ideal for:

Bank Statement or P&L "Second Mortgage" Loans

Requirements of a non-QM second home loan

As you see below these alternative income loans have similar guidelines to the first mortgage non-QM products.

Pros and Cons of non-QM 2nd Mortgage Loans

Advantages

  • Income: Perfect for borrowers with non-traditional or varying income
  • Quicker approvals: Less documentation results in faster closings
  • Low fees: lower underwriting fee and may qualify for automated valuation
  • Fixed rates: Offered on a 30-year fixed amortization due in 15 or 30 years

Disadvantages

  • Higher interest rates compared to first mortgage loans
  • Minimum credit scores fof 680
  • LTV restricted to 80%

Differences in Second Loan Programs


Feature Traditional Second Loan Bank Statement Second Loan Profit & Loss Second Loan
Income Documentation • Business and Personal Tax returns • Bank account statements (12 or 24 months) • Profit & Loss Statement
Required Verification • 2 yrs business, license or LLC, Corp, or FBN registration • 2 yrs business, license or LLC, Corp, or DBA & 25% or more ownership percentage • 2 yrs business, license or LLC, Corp, or DBA & & 25% or more ownership percentage
Credit Scores • 660 • 680 • 680
Minimum Loan Amount • $100,000 • $200,000 • $200,000
Loan Limits • $750,000 • $1 million • $1 million
Interest Rate (examples) • 7.25%-8.5% • 9.125% to 11.50% • 9.125% to 11.50%

Begin the Process to Close Your Loan

People are asking

What would disqualify me for this loan?+
If your qualifying income is not suffficient or you have a mortgage or rent late payment over 30 days late in the last 12 months. One of these will make you inelgible.
What would disqualify me for this loan?+
Yes. All the standard documents necessary for a first loan along with a copy of your most recent mortgage statement on your first loan as well as a copy of the actual "mortgage note". This can be obtained from your loan servicer if you cannot find it.
What if my income doesn't qualify?+
You're out of luck without income qualifying unless you opt for a hard money loan which requires at least 40-percent equity. The best option for an investment property is to then use a DSCR fixed rate second loan or DSCR HELOC.

Disclosure: Minimum loan amount is $200,000 for residential non-QM loans. Loan guidelines are subject to change per lender at any time until the loan is approved and the rate is locked. Borrowers must be approved by underwriting. Not all applicants will qualify.