NON-QM Loans

NON-QM Loans

Alternative lending solutions for those self-employed and those with credit events.

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Video on Non-QM Loans

Video on Non-QM Loans

What is a Non-QM Loan?

A Non-QM loan is an abbreviation for Non Qualified Mortgage.  Which begs the question, what does "qualified" mean?  In the wake of the 2008 Great Recession, the United States passed several laws to shore up the banking system.  The Dodd-Frank Act gave rise to the Ability To Repay (ATR) rules and the Qualified Mortgage rules.  A Qualified Mortgage are generally "standard" mortgages, i.e. FHA/VA/Conventional with full income documentation, good credit and debt to income ratios under 43%.

A Non-QM Loan offers higher DTI limits, alternative documentation for income and credit.  They are a good way for borrowers who cannot access traditional financing to buy a home.

Who are Non-QM Loans Good For?

A Non-QM Loan can help:

  • The Self-Employed - Borrowers who may write off all their income on their Schedule C or 1120S Tax Returns and thus show no income on paper.  We can qualify with bank statements for 1 or 2 years, either business or personal.
  • Credit Events - Many people had to endure short sales, foreclosures or bankruptcies in the wake of the Great Recession.  Ordinarily to qualify for FHA and other QMs, you have to wait at least 3 years.  Fannie/Freddie require a 7 year wait!  We can do 1 DAY out of a credit event.
  • Investor / Stated Income - For investment properties there are some pure stated income, no income documentation loans.  The qualifying income is derived from the cash flow of the property.
  • Asset Based - For those with a ton of assets and very little qualifying income.  We can use those assets as income unlike traditional financing.

What are the negatives?

Non-QM loans are easier on required documentation than traditional mortgages.  However, they do require "skin in the game" or a lot of assets.  Generally at least 20% down plus closing costs and pre-paids at least.  In addition there may be 1 or 2 discount points and rates 2-5% higher than normal rates.

The idea of a Non-QM is to buy a property NOW rather than wait.  You buy, even with not the best terms TODAY.  You build positive mortgage history.  Then you call me up a few years later and we refinance you when your wait time has expired or your situation has changed where you qualify for Conventional or FHA financing.  It's a win/win!  Click the button below to get started!

Benefits of Getting Your Non-QM Loan With Emmett Dempsey

  • Emmett Dempsey is a veteran and he loves helping fellow veterans with their VA loan.
  • Personalized service from one of Florida's top rated lenders.
  • Balance of online tools and technology with a human client touch.
  • Clarity of mortgage options and financial benefits through a Mortgage Coach Total Cost Analysis.
  • Continued Annual Reviews of your mortgage and personal finances.

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Do I Qualify?

To qualify for a mortgage, lenders typically require that you have a debt-to-income ratio of "43/49." This means that no more than 43% of your total monthly income (from all sources, before taxes) can go toward your new mortgage payment, and no more than 49.99% of your monthly income can go toward your total monthly debt (including your mortgage payment). VA and FHA loans even allow for higher debt ratios on a case by case basis.

Do I Qualify?

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