Second-Home Loans Over $1 Million: Conventional vs Non-QM Options

Purchasing a second home is a significant financial decision—especially when the property value exceeds $1 million. Whether you’re investing in a vacation retreat, a future retirement home, or simply diversifying your real estate portfolio, the type of loan you choose can greatly impact your long-term costs and flexibility. For high-net-worth borrowers, two primary loan categories are available: conventional and Non-QM (non-qualified mortgage) loans.

In this article, we’ll break down the differences between these options, highlight when each is best, and help you navigate the jumbo loan space confidently.

Understanding Jumbo Second-Home Loans

A jumbo loan is any mortgage that exceeds conforming loan limits set by the Federal Housing Finance Agency (FHFA). For most areas in 2025, that limit is $766,550, but it can be higher in high-cost areas.

If you’re financing a second home with a mortgage over $1 million, you’re most likely looking at:

• A conventional jumbo loan (sometimes called a jumbo conforming loan)
  
• A Non-QM jumbo loan
  

Knowing the differences is essential to securing the right terms and approval.

Conventional Jumbo Loans: The Standard Approach

Conventional loans that exceed conforming limits are still underwritten using strict guidelines, typically requiring:

• High credit scores (usually 700+)
  
• Debt-to-income (DTI) ratio under 43%
  
• Significant cash reserves
  
• Full income documentation (W-2s, tax returns, pay stubs)
  

These loans offer relatively lower interest rates and long-term stability, especially if your financial profile is strong and straightforward.

Best for: Borrowers with excellent credit, verifiable income, and liquid assets.

Learn more about conventional jumbo loan guidelines →

Non-QM Loans: Flexibility for Complex Financial Profiles

Non-QM loans are designed for borrowers who don’t meet traditional lending criteria but are otherwise financially sound. This includes:

• Self-employed professionals
  
• Real estate investors
  
• High-income individuals with large tax write-offs
  
• Foreign nationals
  

With Non-QM lenders, you may qualify based on:

• Bank statements instead of tax returns
  
• Asset depletion (using investments as income)
  
• Interest-only payments
  
• Higher DTI allowances
  

Non-QM loans often come with slightly higher interest rates, but they provide invaluable flexibility—a crucial advantage for many affluent borrowers.

Best for: High-net-worth individuals with non-traditional income or complex financial situations.

Explore Non-QM loan types in more detail →

Key Differences: Conventional vs. Non-QM Second-Home Loans

Choosing the Right Option

When deciding between conventional and Non-QM loans for your second home over $1 million, ask yourself:

• Do I have consistent, easily documented income?
  
• Is my credit profile strong?
  
• Am I looking for lower monthly payments or flexibility?
  
• Do I need a faster close with less paperwork?
  

Your answers can help a trusted mortgage advisor guide you toward the best solution for your goals.

Ready to compare second-home loan options? Schedule a call with our mortgage specialists today →

Lock in Your Dream Second Home

With property values rising and inventory tightening, now is the time to act. Whether you’re buying a ski chalet in Aspen or a beachfront home in Malibu, securing the right loan is the first step.

Frequently Asked Questions (FAQ)

Read Next

• What Is a Non-QM Loan? A Homeowner’s Guide to Alternative Mortgage Options
• Is a Non-QM Loan Worth It for High-Net-Worth Borrowers?
  

Final Thoughts

When purchasing a second home over $1 million, your mortgage strategy should be as unique as the property itself. Whether you choose a conventional jumbo loan for its competitive rates or a Non-QM loan for its flexible terms, the right choice depends on your income profile, long-term goals, and appetite for paperwork.