This BLOG On NON-QM Cash-Out Debt Consolidation Refinance With 90% LTV Was Published On January 30th, 2020
NON-QM Cash-Out Debt Consolidation Refinance Explained:
The housing market is hot despite rising mortgage rates.
- Nationwide, home prices have been steadily increasing year after year since 2010.
- Most of Florida, Texas, Georgia, California, Colorado, New Jersey, Indiana, Pennsylvania, Kentucky, Mississippi, Michigan, Illinois have seen home values increase double digits
- Many homeowners are thinking of consolidating all of their debts by doing a cash-out refinancing
- Consumers are paying credit card interest rates north of 20%
- Many consumers have car payments that are higher $500 per month
Gustan Cho Associates Mortgage Group now offers NON-QM Cash-Out Debt Consolidation Refinance up to 90% LTV.
Difference Between NON-QM Cash-Out Debt Consolidation Refinance Versus Traditional Cash-Out Refinance
Many homeowners who purchased their homes a few years ago have seen their values appreciate double digits.
NON-QM debt consolidation refinance is similar to traditional cash-out refinancing with one exception. With NON-QM Cash-Out Debt Consolidation Refinance, the loan to value is higher. Bottom line is more money for homeowners.
Debt consolidation is not always a fun subject to talk about.
- Around the holidays many Americans sink deeper into their debt problems
- Traveling to see family or buying gifts, the holiday season can be costly
- There are numerous different reasons Americans find themselves tangled in debt
- Sometimes a catastrophic event such as a car accident or unexpected medical expenses, or sometimes we are to blame with poor budgeting skills
- No matter what the reason for being in debt is, you want to get out of debt as soon as possible
- Many Americans are sitting on a gold mine of equity in their homes but are unable to tap into it due to credit scores or late payments
- Obtaining a second mortgage in the year 2018 is next to Impossible
- It looks like that trend will continue into the future
- The good news is, even if your credit is whacked we still have mortgage loans available for you
- Gustan Cho Associates carry a full line of NON-QM mortgage products
- We will explain these in more detail below.
What Are NON-QM Versus QM Mortgages
What is a NON-QM mortgage?
- QM stands for qualified mortgage
- Just like it is spelled, it means a non-qualified mortgage
- For more information on what a qualified mortgage is please see our blog explaining a QM MORTGAGE
- In short, a NON-QM mortgage does not follow Fannie Mae, Freddie Mac, VA or HUD guidelines for mortgage qualifications
- They have their individual set of guidelines
- These guidelines are black and white
- We can get exceptions and have a gray area when it comes to underwriting
This opens up mortgage opportunities to many Americans who cannot qualify for your everyday conventional financing.
Debt Consolidation Versus Cash-Out Refinance Loans
What is the advantage of a debt consolidation loan versus a cash-out refinance?
- Most homeowners who do a cash-out refinance mortgage intend on paying off debt with the proceeds
- Why not go the extra mile with NON-QM Debt Consolidation Cash-Out Refinance versus traditional cash-out
By doing so, homeowners with 680 credit scores can go up to 90% Loan To Value.
LTV On NON-QM Cash-Out Debt Consolidation Refinance Versus Traditional Cash-Out Refinance
With NON-QM mortgage loans, there is a major advantage.
- That advantage is the maximum loan-to-value thresholds
- With a cash-out NON-QM Loans, borrowers are capped at 80% loan to value
- But if you were to do a debt consolidation refinance, borrowers are capped at 85% loan-to-value
- That extra 5% can mean getting out of debt faster!
- For credit score 680 and above borrowers can go up to 90% loan to value for a debt consolidation NON-QM mortgage
- That’s right, 90% loan-to-value, that is unheard of in the mortgage industry
- When completing a debt consolidation NON-QM mortgage, you will pay your creditors directly with the loan and can receive a maximum of $2,000 cash in hand after closing
- This is a great opportunity to get back on your feet
Below is a grid of credit scores and maximum loan-to-value is allowed for NON-QM lending.
Credit Scores Versus Maximum LTV Cash-Out Limit
Borrowers’ credit scores dictate the maximum loan to value allowed on non-QM cash-out refinance financing.
Here are the credit scores versus Debt Consolidation Versus Traditional NON-QM Cash-Out LTV Limits:
CREDIT SCORES 500-579
- Cash-Out Refinance 70%
- Debt Consolidation Refinance 75%
CREDIT SCORES 580-599
- Cash-Out Refinance 80% LTV
- Debt Consolidation Refinance 80 LTV
CREDIT SCORES 600-679
- Cash-Out Refinance 80%
- Debt Consolidation Refinance 85%
CREDIT SCORES 680 AND HIGHER
- Cash-Out Refinance 85% LTV
- Debt Consolidation Refinance 90% LTV
Case Scenario Where NON-QM Cash-Out Debt Consolidation Refinance Benefits Homeowners
Example:
Daniel has a home in Riverside California worth $450,000. The current credit score of 611 due to a few late payments on his mortgage and vehicle. He is not married and has the debts below:
Mortgage –
- $274,000
2nd Mortgage (HELOC) –
- $54,400
- Auto Loan –
- $17,500
- Credit Card 1 –
- $11,700
- Credit Card 2 –
- $10,300
- Personal Loan –
- $7,500
Total Debt – $375,400
Daniel was able to combine all of his Consumer Debt into one easy to make the monthly payment.
- At the end of this debt consolidation refinance, Daniel was saving over $700 a month
- Can you imagine what you would do with $700 a month?
- Especially while struggling
- These loans can be life-changing
- He would NOT be able to do this loan with a conventional or FHA loan due to his late payments
- This loan allows Daniel to hit the reset button and get a second chance!
NON-QM Lending Guidelines
NON-QM Loans are becoming increasing more and more popular.
- Home Buyers do not have a mandatory waiting period after bankruptcy and/or housing event like government and/or conventional loans
- There is no maximum loan limit
- There is no private mortgage insurance required
- Gustan Cho Associates has 95% LTV NON-QM Jumbo Mortgages with no mortgage insurance
- We offer bank statement loans for self-employed borrowers with no private mortgage insurance and no tax returns required
- Loan Limits can be up to $3 million and maybe higher depending on circumstances
NON-QM Mortgages are NOT for borrowers with bad credit. Many borrowers with great credit can benefit from our non-QM loan programs.
Non-Borrowing Spouses Debt Does Not Count In Community Property States
Another great feature of NON-QM loan is, NON-QM loans are “conventional” in a sense that community property states rules are not applied:
- They also do not have to follow conforming or FHA loan limits
- There are maximum loan limitations typically $1,000,000 to $3,000,000 depending on credit score
If you have done a cash-out loan in the past, you will understand 90% loan-to-value is out of this world!
- It really opens up the opportunity to get you out of the hole that you’re in
- If you feel like a NON-QM mortgage loan might fit the needs of yourself or your family, please reach out to us directly
- Contact Mike Gracz on 630-659-7644 or shoot an email to mgracz@gustancho.com
- We are experts on the ins and outs of NON-QM Mortgage lending
- There are very few situations we have not come across in the past, we are always here to help
- If for any reason you do not qualify today, or you are not happy with the terms you qualify for, we will put you on a financial plan to qualify for the right mortgage as soon as possible
Consolidating your Consumer Debt into tax-deductible mortgage interest has many benefits. We are available seven days a week to go over your scenario!
