#non-qm

I just received an update from one of my DSCR lenders. What are DSCR loans? A way for investors to use the rent they gain or will gain on an investment property to qualify for a loan to purchase or refinance an investment property. Here are some features: Up to 85% Loan to Value! Credit scores down to 640! ITIN and foreign national investors available! No ratio DSCR allowed! Short term…

One of my lenders mentioned these options to help investors: No-experience investors with credit as low as 500! No income or reserves required. Heavy rehab projects welcome. Foreign nationals and ITIN eligible! Rural properties, 1-4 units accepted. Loans up to $10 million. Lending in all 50 states (for clarification, that’s the lender, not me). I think that the bottom line is that…

This series is up to 8 parts! I never imagined I would continue finding differences. The whole purpose of this series was to highlight the difference between a bank and a specialized or professional independent mortgage lender for home mortgage loan options. If you have outstanding credit, no debt, provable income is outstandingly high, buying a cookie cutter home, and have plenty of money in the…

I just wrote this article for income options!

When I started this series (see 1, 2, 3, 4, 5, and 6 here), I thought only of how to differentiate the skill set, or the person. But then it struck me, the key to this explanation is for you to see the main difference between the two: access to more options (and here was #4 about bank statement loans, surprisingly, something a depository financial institution doesn’t have). And we all know more…

In the realm of mortgage lending traditional loans dominate the landscape. However, for some borrowers particularly those who don't fit neatly into the conventional lending criteria, alternative options like Non-QM (Non-Qualified Mortgage) loans offer a pathway to homeownership. These loans cater to individuals who may have unique financial circumstances or non-traditional income sources providing them with access to the housing market that might otherwise be out of reach.

Non-QM loans differ from conventional mortgages primarily in their underwriting standards. While traditional lenders typically adhere strictly to guidelines set by government-sponsored entities like Fannie Mae and Freddie Mac Non-QM lenders have more flexibility in their approval process. This flexibility allows them to consider a broader range of factors beyond just credit score and income verification.

One of the key features of Non-QM loans is their ability to accommodate borrowers with irregular income streams. This could include self-employed individuals freelancers or those with significant investment income. Unlike traditional loans that rely heavily on W-2 forms and tax returns to verify income, Non-QM lenders may accept alternative documentation such as bank statements or profit-and-loss statements to assess a borrower's ability to repay the loan.

Additionally, Non-QM loans may be suitable for borrowers with unique financial profiles, such as those with recent credit events or a high debt-to-income ratio. While these factors might disqualify them from traditional financing, Non-QM lenders take a more holistic approach to underwriting, considering the borrower's overall financial picture rather than focusing solely on specific metrics.

However, it's essential to recognize that Non-QM loans typically come with higher interest rates and fees compared to conventional mortgages. This is because they represent a higher level of risk for lenders due to the relaxed underwriting standards. Borrowers considering Non-QM loans should weigh the benefits of homeownership against the increased cost of financing and ensure they can comfortably afford the monthly payments.

Furthermore, Non-QM loans encompass a variety of products tailored to different borrower needs. These may include interest-only mortgages, asset-based loans, or loans with alternative documentation requirements. Each type of Non-QM loan serves a specific niche within the market, providing options for borrowers who may not qualify for traditional financing but are still capable of repaying a mortgage responsibly.

5 things every self-employed borrower needs to know to get a mortgage loan!

The self employed seem to have a harder time getting a mortgage loan. I am convinced that’s because you just don’t know all the options available to you! Here are 5 things you MUST KNOW before you get turned down and deflated… Conventional and government lending operate off of a 2 year income scale. In general, unless you have been in business for 5 years and can prove it (and then there’s only…