Non-QM Loan
What is a Non-QM Loan?
A Non-QM (Non-Qualified Mortgage) loan is a type of mortgage that is not backed by Fannie Mae or Freddie Mac, which means it doesn't have to adhere to the same underwriting guidelines as conventional loans. Non-QM loans may not meet typical standards, like specific debt-to-income ratio requirements. Instead, approval is based on other factors, such as the borrower’s credit score, income history, or assets.
Who is eligible for a Non-QM Loan?
Non-QM loans are ideal for borrowers who don't meet the standard underwriting criteria set by Fannie Mae and Freddie Mac. These loans are tailored for individuals who may face challenges obtaining a traditional mortgage due to factors like low credit scores, irregular income, or a higher debt-to-income ratio. Eligibility for a Non-QM loan can vary depending on the lender’s specific requirements.
What are the benefits of a Non-QM Loan?
Non-QM loans provide several advantages for borrowers who may not qualify for traditional mortgages. These loans often come with more flexible terms compared to those outside of standard guidelines. Borrowers may have the opportunity to secure lower interest rates or reduce their down payment, making homeownership more attainable. Additionally, Non-QM loans are an excellent option for self-employed individuals whose income varies from month to month, offering a more viable path to financing.
What are the requirements for obtaining a Non-QM Loan?
Non-QM loans can vary depending on the lender’s specific requirements, but there are certain common factors across most of these loans. Borrowers will typically need to provide documentation verifying their income, employment history, and credit score. Since Non-QM loans are considered higher risk, they often come with higher interest rates and fees compared to traditional mortgages.
Additionally, borrowers can expect a more detailed underwriting process, as lenders need to ensure the borrower can repay the loan. It’s also important to note that Non-QM loans usually require a substantial down payment. While the exact percentage can vary, borrowers should anticipate needing to put down up to 20% of the home's purchase price.
Contact NEXA Mortgage today to learn if a Non-QM Loan is right for you!
LINKS
CONTACT INFO
LICENSING
NMLS# 1403947
