Alternative Lending Mortgage Options For Bad Credit
Thanks to alternative lending mortgage options, homebuyers who could not qualify for government and conventional loans can now qualify for specialty non-conforming mortgage loans. The 2008 Real Estate & Lending Collapse 2008 eliminated the subprime mortgage markets.
Over 30% of our borrowers at Gustan Cho Associates are folks who need alternative lending mortgage options such as no income documentation loans, DSCR, ITIN, Foreign Nationals, Expatriate Mortgage Loans, bank statement loans, asset-depletion, mortgage one day out of bankruptcy and foreclosure, and hundreds of other primary homes, second homes, investment property, and commercial loan programs.
However, with the creation of alternative lending & non-QM mortgages, many homebuyers and real estate investors can now qualify for non-traditional mortgages.
What Are Non-Traditional Alternative Lending Mortgage Loan Options?
Non-QM mortgage loans are alternative lending mortgage options. Non-QM loans also referred to as non-traditional mortgage loans, are portfolio mortgage loans. Non-traditional loans, often called non-conforming mortgages, do not conform to traditional government and conventional lending guidelines.
Portfolio mortgage loans are held by private lending institutions or sold on the secondary market to private investors, institutional investors, insurance companies, hedge funds, or money managers. Non-Traditional alternative lending mortgages use other means of income for qualified income instead of W2s, 1099s, or federal income tax returns. Non-traditional alternative lending mortgage options for bad credit include no-income verification type of loan programs.
Examples of alternative lending mortgage options include non-QM loans with no maximum loan limit caps and no private mortgage insurance, No-doc home loans, profit and loss statement-only mortgage loans, doctor and medical professional mortgage loans, bank statements loans, DSCR mortgages, asset-depletion mortgage loans, stated-income mortgages, and dozens of other alternative lending mortgage loan options.
Alternative Lending Options For Borrowers With Bad Credit
Subprime loan borrowers were unable to obtain non-QM loans to purchase homes. After the 2008 financial crisis, all alternative lending mortgage programs were eliminated. Borrowers who did not qualify for traditional conforming loans such as FHA and Conventional loans were left out of the marketplace to purchase homes. This was due to not having access to Alternative Lending and Non-Prime Mortgages.
Over 80% of our borrowers at Gustan Cho Associates are folks who could not qualify at other mortgage companies due to lender overlays or because they could not qualify at other mortgage companies because the lender did not have the mortgage loan program the borrower was looking for. Gustan Cho Associates, empowered by NEXA Mortgage, LLC, are mortgage brokers licensed in 48 states, including the United States Virgin Islands, Puerto Rico, and Washington, DC with over 210 wholesale lenders of government and conventional loans with no lender overlays and non-QM and alternative lending partners with over hundreds of non-QM mortgage loan options.
These borrowers were great borrowers who could afford to make the payments on their mortgage loans. Now, alternative lending and non-QM loans are back. Not all mortgage companies offer alternative lending and non-QM mortgage options. Gustan Cho Associates has over 210 wholesale mortgage lending partners. You can rest assured we have every alternative lending mortgage option available in today’s marketplace.
Best Non-QM and Alternative Lending Partners For Niche Non-Conforming Loans
Many homebuyers can easily afford the down and monthly housing payments on a home purchase. However, they do not qualify for traditional and conforming loans due for one reason or another. Government and conventional loans have strict set agency mortgage guidelines about credit, debt-to-income ratio, and derogatory credit.
Alternative lending programs have more a common sense applies foundation. Alternative lending and non-QM mortgage guidelines depend on the individual non-QM mortgage lender. The reason why non-QM and alternative lending mortgage programs were so popular before the 2008 financial crisis because of the ease and no red tape in getting a mortgage approved.
Today, Gustan Cho Associates has hundreds of different alternative lending mortgage options for homebuyers of primary and investment homes. The team at Gustan Cho Associates are experts in non-QM and alternative lending mortgage programs for owner-occupant, second homes, and investment properties.
Why Do Homebuyers Turn To Alternative Lending Mortgage Options?
Many homebuyers who cannot qualify for conforming loans have the means and income to afford to be homeowners. But due to the non-existence of subprime mortgages, they were stuck being renters in a hot real estate market. They saw home values appreciated before their eyes. These borrowers had the desire, ability, and means. They were prime candidates for alternative lending and subprime mortgage loans. They were perfect candidates but could not have access to alternative lending and Non-QM mortgage programs now offered by Gustan Cho Associates.
Alternative Lending With No Income Documentation
No-doc mortgages were the most popular loan program before the 2008 financial crisis. Non-QM No-Doc Mortgages are now back in full force, and an instant hit.
Gustan Cho Associates recently launched no-QM no-income documentation mortgages for homebuyers with at least 640 credit scores for primary homes. No doc mortgages require a 20% down payment. Reserves are required on no-doc home loans.
The number of reserves months depends on the borrowers’ credit scores. Other no-doc loans are offered at Gustan Cho Associates, including DSCR loans, bank statement loans, asset-depletion mortgages, and stated income mortgage loans.
Asset-Depletion Alternative Lending Guidelines
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Borrowers with substantial assets and no steady income stream can now qualify for Asset-Depletion Mortgage Programs offered at Gustan Cho Associates Mortgage Group. Income is derived from the assets of borrowers.
First and foremost, borrowers must have 110% of the loan balance in assets. Income is derived by taking the liquid assets of borrowers and dividing them by 60 months. The resulting figure will be the monthly qualifying income.
Retirement accounts such as 401ks and IRAs can be used. However, 70% of the retirement account balance is used as liquid assets. The liquid assets are then divided by 60 months. The resulting figure is the monthly qualifying income.
No-Doc Home Loans With No Income Tax Required
Alternative Lending is mortgage loans that benefit home buyers and real estate investors who cannot qualify for traditional and non-conforming loan programs. There are countless alternative lending mortgages on primary, second homes, and investment properties. Borrowers may not have met the mandatory minimum waiting periods after bankruptcy, foreclosure, or short sale to qualify for conforming loans.
Self-employed borrowers who do not have documented income but have bank statements where can qualify for a bank statement loan program. Borrowers who do not qualify for traditional conforming financing due to low credit scores. Borrowers who do not meet the mandatory waiting period after bankruptcy, deed in lieu of foreclosure, foreclosure, or short sale.
There are hundreds of other reasons why alternative lending mortgage options for borrowers who cannot meet conforming loan guidelines. Alternative lending is not just for homebuyers with bad credit or other credit issues. Many borrowers with high credit scores and great profiles benefit from non-QM loans.
Types of Borrowers Who Can Benefit From Alternative Lending Mortgages
Alternative Lending is ideal for borrowers who have the desire and means to afford to make payments but are not able to get accessibility to subprime loans until now. This is because they have a few strikes on their credit or income profile.
Alternative Lending and Non-QM Loans allow home buyers to purchase a home now during a hot housing market. They can often use alternative lending as a bridge loan until they get their credit and income profile.
They can then refinance their home loan to a conforming lower-interest mortgage later. Non-QM loans are for owner-occupant, second homes, and investment properties.
Alternative Lending in a Booming Housing Market For Bad Credit Homebuyers
Homebuyers with bad credit but able to afford and purchase homes can now qualify for alternative lending mortgage options in a booming housing market. They no longer have to meet the waiting period requirements after bankruptcy and foreclosure.
Homebuyers with late mortgage payments in the past 12 months can qualify for non-QM loans. Home values are skyrocketing in many parts of Illinois, Kentucky, New Jersey, Pennsylvania, Mississippi, Colorado, Michigan, Indiana, Georgia, Florida, Texas, and California.
The housing market started to recover starting in 2010. Home prices have been appreciating where it left non-conforming borrowers out of the housing market and just forced them to become renters.
Alternative Lending Distribution
With the comeback of alternative financing, these non-conforming subprime borrowers can participate in the housing market. It gives them a chance not to miss out on becoming homeowners in a hot real estate market. By all indications, it does not seem like there is a pullback around the corner. Folks who could not qualify for traditional FHA, VA, USDA, and Conventional loans due to not meeting the mandatory waiting period after bankruptcy and foreclosure can now qualify with Alternative Financing at Gustan Cho Associates.
What Is Non-QM and Alternative Lending?
Non-QM loans and alternative lending are mortgage loan options that do not meet conforming mortgage guidelines. There are hundreds of alternative lending mortgage companies that focus on niche markets.
Gustan Cho Associates has a network of over 210 wholesale mortgage lenders; many are non-QM and alternative mortgage wholesale lenders.
Alternative Lending Programs are non-prime loan programs geared toward home and investment property buyers who do not qualify for government and conventional loans. Alternative mortgage lenders agree that borrowers’ credit scores do not pay for mortgage loans, but their income and job stability do.
Non-QM Jumbo Mortgages
The team at Gustan Cho Associates are experts in originating non-QM jumbo mortgages with credit scores down to 550 FICO. A 20% to 30% down payment is required. The down payment and reserve requirements depend on the borrower’s credit scores. Verification of rent is required. Three credit tradelines of at least one year of seasoning or two credit tradelines with two years of seasoning are required.
Non-QM Jumbo Loans are non-traditional jumbo mortgage loans that uses non-traditional income as qualified income. Generally no income tax returns or traditional income docs are required on non-QM jumbo loans. There is no private mortgage insurance or no maximum loan limit on non-QM Jumbo Mortgages.
Gustan Cho Associates offers non-prime jumbo mortgages and various alternative financing programs never heard of after the 2008 real estate and mortgage meltdown. Before launching non-prime loans this year, non-prime borrowers did not have a choice of even thinking about purchasing a home. They were stuck being renters. Gustan Cho Associates can now help non-prime borrowers get qualified for a home loan and become homeowners.
Non-Prime Mortgages For Homebuyers During Booming Housing Market
Non-QM loans are alternative lending mortgage options offered by portfolio lenders. There are hundreds of different types of alternative and non-QM mortgage lenders. Non-Qualified borrowers can now qualify for non-prime loans without waiting the years required to qualify for prime loans after bankruptcy, deeds in lieu of foreclosure, bankruptcy, and short sale.
Gustan Cho Associates offers residential and investment non-qualified mortgages for borrowers with stable employment and incomes. Gustan Cho Associates are mortgage brokers licensed in 48 states, including Puerto Rico, Washington, DC, and the United States Virgin Islands.
We have a wholesale lending network of over 210 wholesale lending partners. There is not a mortgage loan program that is in the marketplace that you will not be able to find it at Gustan Cho Associates.
No-Income Documentation Mortgages
Here are some of the subprime and alternative financing offered by Gustan Cho Associates. Bank Statement Loan Program:
- For self-employed borrowers where income tax returns are not required
- Ideal for Self-Employed Borrowers
- If more than one borrower, we will use the primary borrower’s middle credit scores and not the lower of the two borrower’s middle credit scores like prime lenders use
No documentation that mortgages are back. No income documentation is required. The minimum credit score requirement for non-doc loans is 640 FICO. The homebuyer needs a 20% down payment.
There is no maximum loan limit. Reserves are required with all non-QM loans and no-doc mortgaes. The number of months of reserve requirements depends on the borrower’s credit score.
The higher the credit scores, the lower the reserve requirements. Nonprime lenders are open-minded and can make exceptions on a case-by-case basis as long as the deal makes sense.
Alternative Lending And Subprime Mortgage Programs
Here are the alternative lending and nonprime mortgage programs offered by Gustan Cho Associates:
- No waiting period out of foreclosure, short sale, deed in lieu of foreclosure, and bankruptcy
- Loan Limits up to $1 million
- Borrowers can have credit scores down to 500 FICO
- Up to 90% Loan To Value
- 95% Loan To Value Jumbo Loans With No Mortgage Insurance
- Debt To Income Ratio up to 50% DTI
- Owner-occupied, 2nd homes and investment properties ARE eligible for alternative financing.
- Non-warrantable condos considered
- Jumbo mortgages down to 500 FICO
- Adjustable Rate Mortgages, ARM, or 30-year fixed
- No pre-payment penalty for owner-occupant homes and 2nd homes
- No credit tradeline requirements
- SFRs, townhomes, condos, 2-4 units on residential and investment properties
- Seller concessions allowed on owner-occupant and second homes up to 6%
- Investment properties are limited to 2% seller concessions
- Asset-Depletion Mortgage Programs
Alternative Lending and Nonprime Mortgage Lenders
If you are a non-prime borrower interested in alternative financing, don’t hesitate to contact us at Gustan Cho Associates at 800-900-8569 or text for a faster response. Or email Gustan Cho at email@example.com. The team at Gustan Cho Associates is available seven days a week, on evenings, weekends, and holidays.
Gustan Cho Associates has a national reputation for being able to do mortgage loans other lenders cannot do. Due to the experience and expertise of our veteran loan officers, over 80% of our borrowers are folks who could not qualify at other mortgage companies.
We have a national reputation for being a one-stop mortgage shop. This is due to having every available mortgage product in today’s market. Alternative lending options are becoming very popular for primary owner-occupant homes, second homes, investment properties, and commercial loans.
: Start The Qualification And Pre-Approval Process With Gustan Cho Associates
January 25, 2023 - 9 min read