Mortgage Rates On NON-QM Loans And No Doc Mortgage Loans

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This BLOG On Mortgage Rates On NON-QM Loans No Doc Mortgage Loans Was Updated And Published On January 29th, 2020

What does the interest rate on NON-QM mortgages and mortgage loans without Doc

Current Home Mortgage Rates after the election of President Donald Trump has been increased to an all-time high since 2008. Rates on conventional loans are in the 5.0% range for prime borrowers. Jumbo mortgage rates for prime borrowers are nearing 6% and many times higher due to LLPA.

  • Many home buyers cannot qualify for government and conforming loans due to higher housing prices
  • FHFA has increased conforming limits on conventional and high balance loans throughout the United States
  • NON-QM Loans are becoming the home loan of choice for many home buyers
  • NON-QM Loans are not HARD MONEY LOANS
  • NON-QM Loans are not for borrowers with bad credit

In this article, we will cover and discuss Mortgage Rates On NON-QM Loans And No Doc Mortgage Loans.

Credit Scores Versus Non-QM Mortgage Rates

Perfect credit profile borrowers can benefit from non-QM loans versus government and/or conventional loans:

  • Housing prices have been increasing despite the highest mortgage rates since the Housing Market Collapse of 2008
  • There does not seem to be a housing correction in the near future
  • FHFA Announced Increasing Conforming Loan Limits for 2019
  • This is the third time FHFA has increased conforming loan limits

FHFA has been increasing conforming loan limits for the past three years in a row.

Increase Of Mortgage Rates And Housing Prices

Mortgage rates have been steadily going up since the new year 2018:

  • Many borrowers are waiting for that big correction
  • Current mortgage rates for FHA loans have gone up three-quarter of a percentage point since last October 2017
  • Conventional mortgage rates are currently hovering around the 5.0% mark
  • This year has been the year where NON-QM Loans and no doc mortgage loan programs have hit the market
  • Bank Statement Mortgage Loan programs for self-employed borrowers are now very popular
  • Many home buyers with prior bankruptcies and foreclosures no longer have to wait the minimum waiting period after bankruptcy and/or foreclosure

This is due to the many options they now have with the introduction of NON-QM Loans and Alternative Financing loan programs.

Mortgage Rates On Non-QM Loans On Second Home Financing

Is the mortgage rate on non-QM loans to finance your second home

Current home mortgage rates for second homes are the same as owner-occupied rates depending on borrowers’ credit profile and income as well as the borrower’s debt to income ratio.

There are no doc investment property loans where borrowers’ income and tax returns are not required.

Where Are Mortgage Rates On NON-QM Loans Headed?

Home Mortgage Rates On NON-QM Loans started to creep up starting last November and starting the new year, mortgage rates have consistently have been going up week after week.

  • When the stock market goes up, mortgage interest rates go up
  • The Dow Jones has been in positive territory week after week
  • Historically, the stock market has always done very well in January
  • Many analysts predict a major correction and so do investors
  • Those borrowers who have not locked their mortgage rates are now paying the price
  • Many of my clients who have a clear to close are delaying their closing hoping that there will be a market correction
  • Borrowers who are refinancing can afford to speculate in waiting for mortgage rates to drop

But homebuyers do not have their luxury unless they want to delay their purchase closing.

Mortgage Rates And Economic News

Nobody has a crystal ball and can predict what the credit markets will do.

  • Interest rates have gone up so rapidly this year
  • Many, including myself, feel that there will be a major market correction
  • However, interest rates have been spiking up week after week
  • For borrowers who barely qualified for a mortgage because of tight debt to income ratio, I strongly recommend that they lock their rates
  • There is a strong possibility that mortgage rates can drop

There is also the probability that mortgage rates will continue to climb.

Introduction Of NON-QM Loans And Alternative Lending

What is the importance of introducing loans other than QM and alternative loans

NON-QM Loans and subprime lending is back.

  • Bank statement mortgage loans and no doc mortgage loans for self-employed borrowers are back
  • They are more popular than ever before
  • Mortgage Rates On NON-QM Loans are generally higher than traditional financing
  • However, most non-QM loan programs do not require income verification and/or tax returns
  • There is no mortgage insurance required on non-QM loans
  • 5% down payment NON-QM Jumbo Mortgage with no private mortgage insurance is now available
  • Borrowers can qualify for non-QM loans with credit scores down to 500 credit scores
  • No limits on non-QM mortgages like conforming and government loans
  • 5% to 20% down payment

Mortgage rates on non-QM loans depend on borrowers’ credit scores and down payment. Higher credit score borrowers can get better rates on non-QM loans than conforming loans due to no private mortgage insurance. Non-QM mortgage rates range between 6% to 9% with no mortgage insurance. For more information on non-QM financing, please contact Gustan Cho Associates at 262-716-8151 or text us for a faster response. Or email us at gcho@gustancho.com.

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