A denial usually means the first lender couldn't make your file fit the guidelines it had. These are the other ways a file can be documented, qualified or structured through Cornerstone First Mortgage, LLC. Which one fits depends on the exact reason you were turned down.
Non-QM ("non-qualified mortgage") programs still verify your ability to repay. They just accept different proof of income than tax returns.
Income is figured from 12 or 24 months of personal or business bank deposits instead of tax returns. An expense factor is applied to business deposits so the result reflects what the business actually nets.
Often helps: Business owners whose write-offs make their tax returns understate their income.
A 12-month profit and loss statement prepared by your CPA or tax preparer documents the income. Depending on the program, it may be paired with a short run of bank statements or stand on its own.
Often helps: Established owners with clean books and a tax professional who knows the business.
1099 income can be qualified from your 1099 forms instead of tax returns. When the company that pays you documents that you carry no job-related business expenses, some programs treat you much like a wage earner and do not require a two-year self-employment history.
Often helps: Contractors, and people who recently switched from W-2 to 1099 with the same type of work.
Eligible savings, brokerage and retirement assets are used to show the ability to repay, instead of (or alongside) employment income. You do not have to sell the assets.
Often helps: Retirees, early retirees and anyone with substantial assets but little documented income.
Some denials come down to a missing Social Security number, a foreign address, or rental income a lender would not count.
Dedicated programs for borrowers with an Individual Taxpayer Identification Number instead of a Social Security number, including options that do not require a traditional credit score. Alternative credit such as rent, utilities and insurance may be used. Cornerstone has a bilingual team (Spanish and Portuguese) that can handle the whole loan.
Often helps: Buyers who file taxes with an ITIN.
A DSCR (debt service coverage ratio) loan qualifies an investment property on its rental income compared with its housing costs, instead of on your personal income. First-time investors can be eligible, and some programs can use short-term-rental income.
Often helps: Investors whose tax returns or debt-to-income ratio get in the way.
Financing for buyers who live outside the U.S., mostly for investment properties qualified on rental income. No U.S. credit history is required, and vesting in an LLC is allowed.
Often helps: International investors buying U.S. rental property.
Some denials on these loans come from a lender’s overlays, not the program itself. Cornerstone underwrites to the agency guideline as written.
Insured by the Federal Housing Administration, with credit and debt-to-income guidelines that are often more flexible than conventional loans. Underwriters can also weigh compensating factors in a file.
Often helps: Buyers rebuilding credit or carrying more debt than a conventional loan allows.
Guaranteed by the Department of Veterans Affairs for eligible veterans, service members and some surviving spouses. VA underwriting looks at residual income as well as debt-to-income.
Often helps: Veterans and active-duty buyers.
Backed by the U.S. Department of Agriculture for eligible properties in qualifying rural and suburban areas, with household income limits.
Often helps: Buyers in eligible areas who meet the income limits.
Conventional loans follow Fannie Mae and Freddie Mac guidelines; jumbo loans cover amounts above the conforming limit, with prime (QM) and non-QM jumbo options.
Often helps: Buyers with documented income whose first lender added overlays or could not handle the loan size.
Sometimes the income and credit are fine, and the problem is cash, timing or the property.
Your file is fully underwritten before you choose a home, so the approval has already been checked by an underwriter instead of being a pre-qualification letter. It may help surface underwriting issues earlier; the approval is still conditional on the property and on your finances not changing.
Often helps: Anyone whose last pre-approval fell apart, and buyers making offers in competitive markets.
Cornerstone has a dedicated team that searches state and local down payment assistance programs where you are buying. Many programs also accept gift funds from family.
Often helps: Buyers who qualify for the payment but are short on cash to close.
Condo projects that fail agency warrantability rules (for example because of litigation, investor concentration or commercial space) can sometimes be financed through non-QM programs.
Often helps: Buyers whose loan was denied because of the condo project, not the buyer.
Programs that let you buy the next home before the current one sells, so a sale contingency or two housing payments does not sink the purchase.
Often helps: Move-up buyers whose approval depends on selling first.
A single loan and a single closing that covers construction and becomes the permanent mortgage, so you do not have to requalify when the build finishes.
Often helps: Buyers building a home, including on land they already own.
You don't have to pick. Tell Tanner what happened and he'll check your file against the options that apply.
Non-QM programs require alternative income documentation. All loans are subject to underwriting approval, income/asset verification, appraisal, and an ability-to-repay determination. Not all applicants will qualify. Program availability and guidelines are subject to change without notice. Cornerstone First Mortgage, LLC NMLS #173855.