Non QM Loans – Old Town Lending

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

What kind of property can I purchase?

How to avoid needing a non-QM loan

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 & Cons of Non-QM Loans

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.

Helping You Buy on Your Own Terms

You owe it to your self to explore our hassle-free mortgage options at low and affordable rates.

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