Non QM Mortgage Loan
WHAT TYPE OF NON QM MORTGAGE LOAN DO WE OFFER?
A non qm mortgage Loan is a home loan that does not meet the Consumer Financial Protection Bureau guidelines for Qualified Mortgages. Generally, these loans are considered non-conventional, meaning they do not conform to government-sponsored enterprise guidelines like those of Fannie Mae and Freddie Mac. non qm mortgage loans may be an option for borrowers with unique or complex financial circumstances that make them ineligible for traditional conforming loans. However, because they are often considered higher risk, interest rates on non qm loans may be higher than on conventional loans. Lenders may also have underwriting requirements and scrutinize borrowers’ creditworthiness more closely.
We offer a variety of non qm mortgage loans, such as DSCR, Bank Statement Loans, No Income Verification, non-warrantable condos, Reverse Mortgages / HECM, and down payment assistance / MSHDA.
DSCR LOAN
DSCR (Debt Service Coverage Ratio) mortgage is a commercial or investment property loan that calculates the borrower’s ability to make interest and principal payments based on the cash flow the property is expected to generate. The DSCR is a financial ratio used to assess the borrower’s ability to cover the mortgage payments based on the income generated by the property. A DSCR mortgage is ideal for borrowers looking to purchase an income-generating property but may need a more substantial personal financial history.
BANK STATEMENT LOAN
A bank statement mortgage permits borrowers to use bank statements or other alternative forms of income verification to show their ability to repay the loan rather than relying on traditional documentation like tax returns or W-2 forms. The process involves analyzing borrowers’ bank statements to determine their income and expenses. This type of mortgage can benefit self-employed individuals, freelancers, or those with non-traditional sources of revenue.
NO INCOME VERIFICATION LOAN
A no-income verification mortgage is a home loan that does not require borrowers to provide income documentation such as pay stubs or tax returns to prove their income. Instead, lenders may use other methods to verify the borrower’s income, such as bank statements or proof of assets. These types of loans are typically offered to self-employed individuals or those with non-traditional sources of revenue. However, they may come with higher interest rates and stricter eligibility requirements than traditional mortgages.
NON WARRANTABLE CONDOS
A non-warrantable condo loan is a mortgage loan backed by the lender. It cannot be sold to Fannie Mae or Freddie Mac or insured by the Federal Housing Administration or Veteran’s Administration. This is usually because the condo project does not meet specific requirements set by Fannie Mae, Freddie Mac, FHA, or VA, such as having too many investor-owned units or having a single-unit owner who owns too many units in the complex. Non-warrantable condos are riskier for lenders, meaning borrowers may face stricter eligibility requirements and higher interest rates. However, non-warrantable condo loans can be an option for borrowers who cannot qualify for a traditional mortgage or want to purchase a unique property that does not conform to Fannie Mae, Freddie Mac, FHA, or VA requirements.
Is a Non QM Mortgage Loan Right for me?
Non-QM mortgage loans offer a lifeline to borrowers who find themselves outside the traditional lending box. These loans are particularly appealing to self-employed individuals, freelancers, and gig economy workers who may have irregular income patterns or complex financial situations. With non-QM loans, these borrowers can use alternative documentation such as bank statements or asset depletion to prove their ability to repay, rather than relying solely on traditional W-2s or tax returns. This flexibility opens doors to homeownership that might otherwise remain closed.
Another group that benefits from non-QM loans are real estate investors and those seeking to purchase unique properties. Non-QM products often allow for higher debt-to-income ratios and can accommodate the purchase of multiple investment properties beyond the limits set by conventional loans. For investors looking to expand their portfolios or individuals interested in non-traditional properties like vacation homes or mixed-use buildings, non-QM loans provide the necessary flexibility and higher loan amounts to make these purchases possible.
Lastly, non-QM loans can be a valuable option for borrowers who have experienced recent credit events such as bankruptcy or foreclosure. While traditional loans may require waiting periods of several years after such events, some non-QM lenders offer programs that allow borrowers to qualify much sooner. This quick path back to homeownership can be crucial for those looking to rebuild their financial lives. Additionally, non-QM loans often consider a broader picture of a borrower’s financial health, looking beyond just credit scores to factors like assets and overall financial stability, making them an attractive option for those with unique financial profiles.