Non-QM Loans
Unique loans for unique circumstances.
Our Non-QM Home Loans
Your situation is unique, and so should your home loan. Non-qualifying mortgage (QM) loans are for borrowers who may not fit conventional mortgage guidelines but can qualify in alternative and flexible ways.
About Non-QM Loans
Is This Loan for You?
These are loans that fit outside the box for borrowers who may not fit inside the box.
Not every borrower fits neatly inside a traditional government matrix, or the requirements designed for conventional loans.
That’s where a Non-QM loan can be helpful. A Non-QM loan can be the solution to help a borrower achieve the American dream of home ownership.
Most often, we find borrowers are in one of three situations that best fit a Non-QM loan:
- Self-employed borrowers with a lot of income tax write-offs
- Borrowers with credit blemishes
- Investors wishing to purchase rental or vacation home properties.
Benefits
A temporary or permanent solution to help you own that dream home.
If you’ve found your dream home but were denied a home loan, a non-QM product may be worth considering. Here are some of the positives of non-QM loan products, designed with the following borrowers in mind:
SELF-EMPLOYED: Instead of tax returns, non-QM lenders offer bank statement mortgage loans. With 12 to 24 months’ worth of personal or business statements, the lender evaluates deposits to determine your qualifying income.
BAD CREDIT: You may qualify for a non-QM loan one day after completing a bankruptcy or foreclosure. For standard loan programs, you typically need to wait two to seven years after a significant credit event.
FOREIGN NATIONALS:A foreign national is a citizen of another country who lives in the U.S. for brief periods for work or vacation. Non-QM loans for foreign nationals may not require proof of U.S. income, credit or a Social Security number.
Loan Eligiblity
Flexible guidelines designed just for you;
we want to help you achieve your goal.
While there are no uniform underwriting standards for non-QM loans, lenders tend to specialize in certain types of non-QM products. Interest rates and loan terms may vary widely from lender to lender. Data compiled by CoreLogic in 2019 found the following common credit characteristics of closed non-QM loans:
- Average credit score of 760 (not a rule, there are programs for those with lower scores)
- Average down payment was 21% to avoid the added cost of mortgage insurance
- Average debt-to-income ratio: The average DTI ratio for non-QM homebuyers was higher in contrast to the DTI ratio for QM homebuyers
Non-QM Home Loan FAQs
Non-QM loans are tailored more so to the borrower than they are to the property. In general, you can purchase any home that is qualified for any of the following loan programs:
- Conventional
- FHA
- VA
- Land
Here are some steps you can take to improve your chances of qualifying for a qualified mortgage, such as:
BOOSTING YOUR CREDIT SCORES: Paying bills on time, and paying off credit card balances each month may help improve your credit score.
FINDING A CO-BORROWER: Adding the income of a co-borrower may help you meet traditional loan DTI ratio requirements.
PUTTING MORE MONEY DOWN: A higher down payment equals a lower loan amount and monthly payment. That may help you qualify for a standard mortgage.
GETTING A SIDE HUSTLE: The extra money from a second job may help you save more money for a down payment. If you can document continuous income from a second or part-time job for the past two years, it may also count toward your qualifying income.
BUYING A MULTIUNIT HOME AND QUALIFYING WITH RENTAL INCOME: If you want to live in a two- to four-unit home, the rent from the other units may help you qualify for a mortgage. Even better: Some programs let you buy a multiunit home with a down payment as low as 3.5%.
PROS OF NON-QM LOANS:
- Alternative documentation is allowed
- Credit requirements are more relaxed
- Products are available to foreign nationals
- Investors are not limited by the number of financed properties they own
CONS OF NON-QM LOANS:
- Down payments are typically higher
- Interest rates and costs are usually more expensive
- Risky features (such as interest-only payments) may increase your risk of default
- Non-QM products may be harder to find
Talk to us about your situation and learn if a non-QM loan is right for you.