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

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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!

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