At WIN Mortgage, we understand that not every homebuyer fits the standard mold for traditional loans. That’s where non-qualified mortgage (non-QM) loans come in. Danielle Desousa, the Pet Friendly Lender, is here to help you navigate the unique options that non-QM loans provide. Whether you’re self-employed, a real estate investor, or have an unconventional income situation, non-QM loans can be your pathway to homeownership.
What is a Non-QM Loan?
After the mortgage meltdown in 2008, federal regulations tightened the requirements for mortgages to reduce risk. These mortgages, known as qualified mortgages, follow strict guidelines. However, not all borrowers fit into these guidelines, and that’s where non-qualified mortgages (non-QM) come into play.
A non-QM loan uses alternative methods to verify a borrower’s income and ability to repay the loan. While these loans fall outside traditional requirements, they are not
inherently riskier. In fact, non-QM loans simply offer flexibility for those with unique financial situations. While non-QM loans can come with higher interest rates (usually 0.5% to 5% higher), they provide valuable solutions for borrowers who need non-standard options.
Who Can Benefit from Non-QM Loans?
Non-QM loans are ideal for borrowers who may not have traditional income
documentation but still possess the financial means to own a home. These loans can be
beneficial for:
● Self-Employed Borrowers: If your income is irregular or comes from multiple sources, a non-QM loan allows you to qualify using bank statements rather than
tax returns.
● Real Estate Investors: If you’re buying properties to flip or rent, non-QM loans
can help finance the purchase when traditional loans aren’t a fit.
● Borrowers with Substantial Assets: High-net-worth individuals who prefer not
to liquidate assets can take out a non-QM loan while maintaining cash flow.
● Foreign Buyers: Foreign buyers without a U.S. credit score but with high income
or substantial down payments can qualify for non-QM loans.
● Borrowers with Credit Challenges: If you’ve experienced a bankruptcy,
foreclosure, or have limited credit history, non-QM loans can help you get back
into homeownership.
Benefits of Non-QM Loans
Non-QM loans offer several advantages to borrowers in non-traditional financial situations:
● No mortgage insurance required.
● Loans up to $2.5 million.
● Available as fixed-rate or adjustable-rate loans.
● Fast closing timelines, comparable to conventional loans.
● Can be made to legal entities like family trusts.
● Cash-out refinance loans allow for equity withdrawal up to $500,000.
● No income verification required for some borrowers.
● Offers flexibility for debt-to-income ratios and loan terms beyond 30 years.
Common Non-QM Loan Types
● Bank Statement Loans: For self-employed borrowers using bank statements to verify income instead of tax returns.
● DSCR Loans: Debt Service Coverage Ratio (DSCR) loans are great for real estate investors using rental income to qualify.
● Interest-Only Loans: Allows borrowers to pay only interest for a certain period, lowering initial payments.
● Asset-Based Loans: Qualify based on assets rather than income, perfect for high-net-worth individuals.
Required Documentation for Non-QM Loans The documentation for non-QM loans depends on your financial situation. While traditional loans often require tax returns and income verification, non-QM loans use a more holistic approach. This might include:
● Bank statements (personal or business).
● Investment account statements.
● Tax returns (optional for some loans).
● Credit score and debt-to-income ratio are considered but with more flexibility.
Get Pre-Approved for a Non-QM Loan Today!
At WIN Mortgage, Danielle Desousa, the Pet Friendly Lender, specializes in helping buyers with non-QM loans. Whether you're a self-employed borrower, an investor, or simply have a non-traditional income source, we’ll find the right solution for your homeownership journey.
Contact us today to learn more about how a non-QM loan can help you achieve your goals, and get pre-approved to start your homeownership journey!
Start Your Construction Loan Journey With Us Today!
The following is a partial list of programs offered by WIN Mortgage LLC with a brief description of the key elements of each.
Home Loans Customized For You.
Buy A Home
Provide borrowers with the necessary funds to buy residential properties, offering various terms, interest rates, and down payment options tailored to individual financial situations.
First-Time Home Buyer
Specialized mortgage programs designed to assist individuals purchasing their first home by offering benefits such as lower down payments, reduced interest rates, and educational resources to navigate the home buying process.
Investment/Non QM Loans
Designed to facilitate the purchase or refinancing of properties with the intention of generating rental income or capital appreciation.
Home Equity Line of Credit
A Home Equity Line of Credit (HELOC) is a flexible loan option that allows homeowners to borrow against the equity in their property, providing access to funds for various purposes with the ability to draw and repay funds as needed.
Construction Loans
Offering funding specifically tailored for the development or renovation of properties
VA Loans
Offering favorable terms such as no down payment and competitive interest rates to facilitate home purchases.
Refinance
Loans designed to enable homeowners to replace their existing mortgage with a new loan, often to secure better terms, lower interest rates, or access equity in their property.
