Alternative lending solutions for those self-employed and those with credit events.
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:
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
Other Popular Loan Options
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.
Mortgage rates change every day, and your rate will vary based on your location, finances, and other factors. Get your FREE customized rate comparison below: