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NON-QM Loans

A Non-QM or Non-Qualified Mortgage is a loan that does not meet the Consumer Financial Protection Bureau’s present rules on Qualified Mortgages. This program uses non-traditional methods of verification for responsible borrowers who do not fit the parameters of the normal “qualified-mortgage box.”

Non-QM loans offer alternative methods of qualification for many homebuyers who have fluctuating incomes, lump-sum incomes or are self-employed like contractors, artists, people who have significant assets, business owners, hospitality workers, retirees, actors, musicians, entrepreneurs, etc. They may have enough income or assets and are capable of repaying the mortgage but for various reasons do not qualify for conventional mortgages.

Who They Benefit

Non-QM loans can be a good fit for individuals who are in any of these unique income situations

Self-Employed

Self-employed for less than two years or self-employed individuals who have irregular income and often more than one source of income may not obtain a qualified mortgage. They can opt for non-QM loans based on their bank statements instead of tax returns.

Prime Borrowers

Those who are eager to take advantage of these loans as their credit scores are high and are looking for a loan that may have interest-only payments. Also, borrowers who have a higher than normal debt-to-income ratio, but can still be able to pay the mortgage.

Borrowers with Substantial Assets

These types of borrowers would prefer going in for a non-QM loan so that they can keep up a positive cash flow instead of purchasing a home with cash.

Buyers with FICO Score Issues

Non-QM loans can also benefit those with sufficient income but credit score issues due to unforeseen circumstances. It can also be helpful to those who have financial hardships like bankruptcy or foreclosure.

Real Estate Investors

Individuals who purchase homes to flip them for profit or turn them to rental properties often prefer non-QM loans because of the quick reversal or due to the qualifying income which will come from the estimated rent.

Foreign Buyers

Non-QM loans help borrowers from other countries who do not qualify for a traditional loan as they may not have a US credit score. However, these foreign buyers need to have substantial assets, down payments, and a high income to qualify for a non-QM loan.

To find out if you qualify for a Non-QM loan contact a Ratebeat mortgage expert today.

Benefits

  • Provides funding for self-employed, people with non-traditional income or other financial situations.
  • Alternative income verification options are available.
  • Flexible underwriting guidelines.
  • Multiple fixed-rate and adjustable loan options are available.
  • The loan maximum is up to 2.5 million.
  • Cash-out refinance loans may as high as $500,000.
  • They close as quickly as conventional loans.
  • Non-QM loans can be used to free up cash for investments.
  • You do not need mortgage insurance.
  • Non-QM loans have multiple options like Fixed-rate adjustable rate, refinance and cash-out refinance. It also provides finance for new homes, second homes, or investment properties.
  • Non-QM loans can be made to family trusts or legal entities, instead of only individuals.
  • You can keep your cash assets liquid instead of investing in real estate purchases. This will allow you to diversify your investments and you can deduct your mortgage interest payments on your income taxes every year. Non-QM loans also protect you if the market declines and saves you from financial loss.

If you feel that you do not fit the necessary guidelines for a conventional mortgage and need expert advice contact Ratebeat Mortgage today.