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NON-QM Cash-Out Debt Consolidation Refinance With 90% LTV

By Mike Gracz On Nov 27, 2018

NON-QM Cash-Out Debt Consolidation Refinance With 90% LTV

This BLOG On NON-QM Cash-Out Debt Consolidation Refinance With 90% LTV Was Published On November 27th 2018

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 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 at Loan Cabin Inc. 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 at Loan Cabin Inc. 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 to 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
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 a 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 dictates on the maximum loan to value allowed on non-qm cash-out refinance financing.

Here is 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. 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 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 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 at Loan Cabin Inc. 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 with 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!