This Article Is About The Benefits of Non-QM Loans and Non-Traditional Mortgages:
Gustan Cho Associates is your trusted partner for Non-QM and Non-Traditional Mortgages. Non-QM and Non-Traditional Mortgages also referred to as alternative financing mortgages are home loans that are unique. Alternative financing loans do not meet the general lending guidelines of traditional government and/or conventional loans. Due to non-QM and non-traditional mortgages, many homebuyers can now qualify for a home loan where they would otherwise not qualify.
Over 50% of our borrowers at Gustan Cho Associates are borrowers of non-QM and non-traditional mortgages. Non-QM loans are not just for borrowers with bad credit. Many borrowers with outstanding credit and higher credit scores benefit from non-QM loans. There are dozens of different types of non-QM and non-traditional mortgages Gustan Cho Associates offers. Gustan Cho Associates is a mortgage company licensed in multiple states with dozens of lending partnerships with non-QM wholesale lenders.
We will discuss and cover the benefits of non-QM mortgages for the non-traditional borrower.
What Are Non-QM Loans and Non-Traditional Mortgages?
Non-Qualified Mortgages are commonly referred to as non-QM loans. Many people are under the belief that non-QM loans are bad credit loans or similar to subprime loans. This is absolutely not the case and a misconception. Gustan Cho Associates has dozens of non-QM loan programs available. Each non-QM loan program has its own rate and term depending on the lender’s layered risk level. As with anything else, risks versus rewards. The higher the risk, the higher the rewards for the lender which is the higher the rate. Non-QM mortgage rates for borrowers with higher credit scores and lower loan to value are competitive and similar to mortgage rates on traditional loans.
Non-QM loans are mortgages that are not Qualified Mortgages. Qualified Mortgages are home loans that fall into compliance with and regulations of the Consumer Financial Protection Bureau (the CFPB) and are regulated by government mortgage agencies. Government and conventional loans and mortgages that are sold in the secondary mortgage markets such as Fannie Mae and/or Freddie Mac are Qualified Mortgages (QM). Many mortgage borrowers do not fall within the lending guidelines of government and/or conventional loans.
Many borrowers of non-QM loans are real estate investors, self-employed borrowers, foreign nationals, and/or wealthy individuals with no positive income on their income tax returns that cannot meet the lending guidelines of qualified mortgages and can only qualify for non-QM and/or alternative financing loan programs. Non-QM loans also benefit borrowers with recent bankruptcies and/or foreclosures. Gustan Cho Associates offers non-QM mortgages one day out of bankruptcy and foreclosure with a 30% down payment.
Borrowers who do not meet the mandatory waiting period after bankruptcy and/or foreclosure on government and conventional loans can now qualify for non-QM loans. Homebuyers do not have to miss out on the booming housing market.
Type of Borrowers Who Can Benefit From Using Non-QM Loans and Non-Traditional Mortgages
Non-QM loans and non-traditional mortgages benefit homebuyers who cannot meet the lending guidelines of traditional government and conventional loans. There is always a home mortgage program for everyone. It can be for borrowers with good credit, bad credit, recent bankruptcy, recent foreclosure, recent late payment, retired borrowers, or those without income but substantial assets. Many borrowers who do not qualify for a government and/or conventional loans can now qualify for a non-QM and/or non-traditional mortgage at Gustan Cho Associates.
For many borrowers, non-QM loans are the only solution to obtain the dream of homeownership become a reality. Gustan Cho Associates realize the fact that many borrowers do not meet government and conventional loan lending guidelines. Due to this fact, we have partnered up with dozens of non-QM wholesale mortgage lenders. Our mission and goal at Gustan Cho Associates are to make every mortgage loan product in the marketplace available for our borrowers. We have developed a reputation of being a one-stop mortgage shop.
Non-QM lending guidelines differ from mortgage guidelines on government and conventional loans. There are no exceptions to a rule and/or guideline on government and/or conventional loans. However, non-QM lenders are more open-minded and can make exceptions. A non-QM mortgage underwriter will look at the borrower’s overall credit and financial profile before making a decision. The ability to repay is very important. However, non-QM lenders will take other types of income into consideration.
Income such as asset depletion, cash-flow through personal and/or business accounts, and other income besides the adjusted gross income of the income tax returns are considered.
Types of non-QM Loan Programs Available at Gustan Cho Associates
Borrowers benefiting from non-QM loans are the following types of borrowers:
- Self-employed borrowers who want to use 12 months of bank statement deposits and not use their income tax returns due to a large amount of unreimbursed business expenses on their tax returns
- Borrowers one day out of bankruptcy and/or foreclosure or those who do not meet the minimum waiting period requirements after bankruptcy and/or a housing event
- Those who had late payments in the past 12-months including housing late payments
- Self-employed borrowers buying higher-end properties and needing to qualify for a non-QM jumbo mortgage with lower credit scores
- Real estate investors who need to use alternative financing loan programs such as asset depletion and/or cash-flow analysis or other creative nontraditional income methods to qualify for rental and/or investment properties
Non-QM loans are becoming the nation’s most popular loan program. This holds especially true for self-employed borrowers. Over 35% of Americans are self-employed. Until the launch of non-QM bank statement loan programs, most self-employed borrowers had a difficult time qualifying for a home. It was a huge challenge for a successful business owner to qualify for a home loan on a home they wanted to purchase. With the 12-month bank statement loan program, self-employed borrowers can now qualify for a mortgage with no maximum loan limit by just using bank statement deposits for the past twelve months. Withdrawals do not matter. Income tax returns are not required. More and more new non-QM and non-traditional mortgages are getting launch every quarter at Gustan Cho Associates. If you want to learn more about the dozens of non-QM loan programs we have available at Gustan Cho Associates, please reach out to us with your contact information at gcho@gustancho.com. Or call us at 800-900-8569. Text us for a faster response. The team at Gustan Cho Associates is available 7 days a week, evenings, weekends, and holidays.
July 28, 2021 - 4 min read