Non-QM Stand Alone Second Mortgages

In today’s market, many homeowners are sitting on substantial home equity but hesitate to refinance because their current first-mortgage rate is far below today’s rates. That’s where a Non-QM Stand-Alone Second Mortgage—also known as a Closed-End Second Lien—can make perfect sense. Tap into your equity without touching your first mortgage. Income verification a problem? Or high debt to income ratio keeping you from qualifying for a traditional HELOC? Then give Home Equity Loan specialist John Thomas Loan Officer with Primary Residential Mortgage a call at 302-703-0737 or APPLY ONLINE

What is a Stand-Alone Second Mortgage?

A stand-alone second mortgage allows you to borrow against your home’s equity without touching your existing first mortgage. Rather than refinancing your entire balance into a higher-rate loan, you take out a second lien for a lump-sum amount, typically up to 90% combined loan-to-value (CLTV) based on your credit, income, and property type

These second liens are ideal for:

Debt consolidation – Pay off high-interest credit cards or personal loans.
Home improvements – Remodel, add an addition, or make energy-efficient upgrades.
Major expenses – College tuition, investments, or other large financial goals.

Why Choose a Stand-Alone Second Instead of Refinancing?

Unlike traditional second-mortgage programs that require full agency underwriting, Non-QM (Non-Qualified Mortgage) loans offer flexibility for borrowers who may not fit conventional guidelines.

Key benefits include:

No refinance required – Keep your existing low-rate first mortgage.
Access up to 90% CLTV – Depending on credit score and documentation type.
Flexible documentation options including Full Doc, Bank Statements, 1099, P&L with bank statements, WVOE & DSCR.
Loan amounts from $75,000 and up – Perfect for medium to large equity draws.
Predictable payments with fixed 10-, 20-, or 30-year terms and full amortization.
Minimum credit score 660 – Programs available for a wide range of borrowers

Loan Terms & Structure of a Fixed Rate Second Mortgage

Closed-end seconds are fixed-rate loans with 10-, 20-, or 30-year terms. Funds are fully disbursed at closing—no draw feature like a HELOC—and the payment is fully amortized, so you’ll have a consistent monthly payment for the life of the loan.

Example:
If your home is worth $500,000 and you owe $300,000 on your first mortgage, you may qualify to borrow up to an additional $150,000 (90% CLTV) in a lump sum while keeping your current low first-mortgage rate intact.

Fast Facts & Eligibility Snapshot

Feature	Guideline
Min Credit Score	660+
Max CLTV	Up to 90% (subject to FICO, occupancy, property type, and doc type)
Loan Amount	$75,000 minimum
Terms	10-, 20-, or 30-year fixed; fully amortized
Documentation Options	Full Doc, 12-mo Bank Statements (SE), 1099, P&L + 3 mo bank statements (SE), WVOE (wage), DSCR
Occupancy	Primary, Second Home, Investment (with CLTV/eligibility variations)
DTI Caps	?80% CLTV: up to 50% DTI; >80% CLTV: up to 45% DTI
Appraisal	Varies by loan amount and property; secondary valuation required

Documentation Options

Depending on your employment and income type, documentation options include:

Full Doc: Standard W-2s, paystubs, and tax returns.
Alt Doc:
- 12-month bank statements for self-employed borrowers
- 1099-income verification
- P&L statements with supporting bank statements
- Written VOE (verification of employment) for wage earners
- DSCR for Investment Properties – No Income Documentation!

Eligible Property Types:

Primary residences, second homes, and investment properties
Single-family, PUDs, condos, and 2–4-unit properties (with CLTV restrictions)
Minimum property size: 700 sq. ft. for SFRs and 500 sq. ft. for condos

When a Stand-Alone Second Mortgage Makes Sense

You have a low-interest first mortgage you don’t want to disturb.
You need cash out but your DTI or documentation doesn’t fit conventional rules.
You’ve experienced a credit event (bankruptcy, short sale, etc.) but have re-established credit over the past 2–7 years.
You want a fixed monthly payment instead of the variable payments that come with a HELOC.

Closed-End Second vs. HELOC: What’s the Difference?

Both options allow you to tap home equity without refinancing, but they’re structured differently:

A Closed-End Second provides a fixed lump sum and fixed payment.
A HELOC (Home Equity Line of Credit) offers a revolving line of credit with variable rates.

For a deeper comparison of these two options, read our detailed post on HELOCs in Delaware here: HELOC Loans

Who May Qualify?

Eligibility is based on your credit profile, income/asset documentation, property type and occupancy, combined liens, and appraisal results. Programs include options for W-2 wage earners and self-employed borrowers with alternative documentation pathways such as no income documentation for investors with our DSCR Second Mortgage Loan.

Talk with a Local Second-Mortgage Expert

John Thomas, Loan Officer (NMLS #38783) with Primary Residential Mortgage, Inc., helps Delaware homeowners tap equity smartly with Non-QM Stand-Alone Second Mortgages and Closed-End Second Liens as well as HELOCs—so you can keep your great first-mortgage rate and still fund what matters.

Whether you’re looking to consolidate debt, remodel your home, or invest in new opportunities, John can help you find the most cost-effective way to leverage your home’s value—without losing your low first-mortgage rate.

Call 302-703-0727 or APPLY ONLINE