Lending Guidelines Ease On NON-QM Jumbo Home Loans

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Lending Guidelines Ease On NON-QM Jumbo Home Loans

This BLOG OnĀ Lending Guidelines Ease On NON-QM Jumbo Home Loans Was UPDATED On April 21st 2018

By Gustan L. Cho

Mortgage loans that exceed Fannie Mae and Freddie Mac conforming mortgage lending limits of $453,100 is known as non-conforming mortgage loans or Jumbo Home Loans.

  • The Gustan Cho Team now offers NON-QM Jumbo Home Loans for self employed borrowers. No income tax returns required
  • 24 months bank statements are averaged to derive monthly income
  • 10% to 20% down payment required. Down Payment depends on borrowers credit scores
  • Minimum credit scores required is 620
  • No private mortgage insurance required. Up to 50% debt to income ratio with compensating factors
  • There is no loan limit
  • Verification of mortgage and/or verification of rent is required on non-qm bank statement loans for self employed borrowers

Great news with NON-QM Jumbo Home Loans is there is no waiting period after housing event and/or bankruptcy. Traditional Jumbo Mortgages require 7 year waiting period after housing event and/or bankruptcy.

Comeback Of NON-QM Mortgages After 2008 Real Estate Meltdown

After the 2008 housing market meltdown, Jumbo lenders took a major hit with the thousands of foreclosures:

  • Many Jumbo mortgage lenders offered stated income/no doc Jumbo home loans
  • This was offered as long as the home buyer had at least 20% down payment
  • It was fairly easy to get a Jumbo mortgage
  • Unfortunately, the historical high foreclosure rates affected the higher end homes
  • Many of those homes plummeted more than 20% of their values during the real estate market collapse
  • The real estate crisis left many Jumbo lenders losing millions if not billions of dollars
  • After the housing collapse, Jumbo lenders eliminated the stated income/no doc mortgage lending program
  • All Jumbo lenders set extremely high credit and income standards
  • 25% down payment and 740 scores and no greater than 40% debt to income ratios were the norm to qualify for a Jumbo mortgage post the real estate meltdown
  • Most Jumbo lenders also required borrowers have at least one year reserve
  • A bankruptcy, foreclosure, deed in lieu of foreclosure, or short sale were not permitted in order to qualify for a Jumbo mortgage

Risk For Lenders With Jumbo Home Loans

Jumbo Home Loans are viewed riskier in the eyes of any mortgage lender.

  • Higher end homes are tougher to sell
  • It also takes longer to sell in the market place in general
  • It is also tougher to qualify for a jumbo home loans than a conventional mortgage loan or government loan such as FHA, VA, or USDA
  • There are cases where high end homes are listed in the market place for over a year without a single showing
  • Higher end homes are normally custom homes that are custom built to suit the homeowners needs
  • A home buyer who is qualified to purchase a high end home will be pickier on the home he or she chooses than a home buyer who only has a certain budget on a home purchase
  • A high end home buyer normally has the means to build his or her own home
  • High end home buyers build their homes to their liking and tastes
  • If a jumbo lender forecloses on high end luxury home, the home can sit for a long time
  • Due to these reasons, jumbo loans are considered riskier loans
  • Higher risk means higher interest rates

High Risk Means Higher Rates And Tougher Lending Guidelines

Since Jumbo Home Loans are considered high risk, most lenders require borrowers to meet the following standards:

  • Higher credit scores
  • Lower debt to income ratios
  • Lower loan to values
  • Reserves
  • Most Jumbo lenders have a 740 score credit requirement
  • Maximum 40% debt to income ratio cap
  • 80% loan to value
  • One year of housing payment reserves which consists of principal, interest, taxes, and insurance
  • A large percentage of Jumbo lenders even have a 75% loan to value requirement

Special NON-QM Jumbo Home Loans

We now have eased mortgage lending requirements to qualify for Jumbo mortgages. The Gustan Cho Team now offers NON-QM Jumbo Home Loans for self employed borrowers: No income tax returns required. We just go off 24 months bank statement deposits. Up to 50% debt to income ratios.

  • We now offer Jumbo loans for high end home buyers with a minimum 620 credit score
  • We also have a special 10% down payment Jumbo loan program
  • No mortgage insurance required with all non-qm loans
  • No Tax Returns Required
  • The 90% loan to value Jumbo mortgage loan program has tougher lending guidelines since the Jumbo mortgage investor has higher risk
  • To qualify for the 10% down payment NON-QM Jumbo Loans, the mortgage loan applicant needs 680 credit score
  • Maximum of 50% debt to income ratio with compensating factors
  • No late payment history in the past 12 months
  • Verification Of Rent and/or Verification Of Mortgage Required
  • No Private Mortgage Insurance Required
  • There is no mandatory waiting period after housing event and/or bankruptcy

High End Home Buyers who need to qualify for NON-QM Jumbo Home Loans for self employed borrowers can contact us at The Gustan Cho Team at 262-716-8151 or text us for faster response. Our team of licensed and support personnel are available 7 days a week, evenings, weekends, and holidays.

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