This article covers Non-QM down payment requirements for home buyers. Non-QM down payment requirements for home buyers is anywhere between 10% to 30% on a home purchase. Let us at Gustan Cho Associates help you qualify for a non-QM mortgage that suits your needs. Apply Now with Gustan Cho Associates on the dozens of non-QM mortgage loan programs we have available for 2024. Many non-QM mortgage loan programs that have been halted for about a year due to the coronavirus pandemic are now back in full force. In this article, we will discuss and cover non-QM loans and their down payment requirements.
Updated Non-QM Guidelines For 2024
Non-QM Loans are becoming increasingly popular for homebuyers who do not meet government and conventional mortgage guidelines. Non-QM, which refers to Non-Qualified Mortgages, are portfolio loans that investors do not require borrowers to meet government and conforming lending guidelines.
Government and conventional loans have mandatory waiting period requirements after bankruptcy, foreclosure, deed-in-lieu of foreclosure, short sale.
Non-QM Loans does not have any waiting period requirements after a housing event or bankruptcy. Homebuyers do not have to wait after bankruptcy or housing event anymore during this rising housing market with non-QM mortgages. Non-QM (Non-Qualified Mortgage) loans are mortgage loans that don’t meet the standards set by the Consumer Financial Protection Bureau’s (CFPB) Qualified Mortgage (QM) rule. Because they don’t conform to these standards.
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Non-QM Loans Down Payment Requirements
The down payment requirements for Non-QM loans can vary widely depending on the lender and the specific loan program. Unlike conventional QM loans, which typically require a down payment of 20% or less, Non-QM loans may allow for: Some Non-QM lenders offer loans with down payments as low as 10% to 15%. These may suit borrowers with limited savings for a larger down payment.
No Down Payment: In some cases, Non-QM loans may be available with no down payment requirements, particularly for certain niche programs or for borrowers with strong credit profiles.
Larger Down Payments: On the other hand, Non-QM loans may also be available for borrowers who want to make larger down payments to reduce their loan-to-value (LTV) ratio and potentially qualify for more favorable terms. It’s essential to note that non-QM loans are typically designed for borrowers who may need to meet traditional mortgage guidelines, such as those with non-traditional income sources, self-employed individuals, or individuals with credit issues.
Frequently Asked Questions on Non-QM Loans
To get accurate and up-to-date information on Non-QM loan down payment requirements, contact multiple lenders and discuss your specific circumstances with them. Each lender may have its underwriting criteria and down payment options for Non-QM loans. As a result, the down payment requirements can vary significantly based on the borrower’s unique financial situation and the loan product the lender offers. Two of the most common inquiries we get daily by our borrowers are the following: What are non-QM down payment requirements What are non-QM mortgage rates.
What Are Non-QM Mortgages
Non-QM Mortgages are alternative forms of home financing for borrowers who do not meet government and/or conforming lending guidelines. Non-QM loans are not just for borrowers with bad credit. Many prime borrowers with high credit scores can benefit from non-QM loans versus traditional government and conventional loans.
Non-QM loans are not hard money nor subprime mortgages. Non-QM mortgage rates are higher than traditional government and/or conventional loans.
However, there is no private mortgage insurance required on all Non-QM Loans. There are no maximum loan limits. There is no pre-payment penalty on residential owner-occupant loans. Non-QM loans are for both primary owner-occupant homes and investment properties. If you are interested to get Non-Qm loans, please fill up form Quote form one of our loan officer or our expert get back to you.
Asset Depletion Mortgages With Non-QM Loans
Borrowers with assets without a steady stream of income may qualify for our Asset Depletion Loan Program at Gustan Cho Associates. No income is necessary. The way our Asset Depletion Loan Program works is our mortgage underwriters will take the borrower’s total assets and divide it by 60 months. The resulting figure will be the borrowers monthly qualifying income. 401k’s and other retirement accounts can be used. 70% of retirement assets are used as liquid assets. Take the liquid assets and divide this by 60 months and you have the monthly qualifying income. Exceptions can be made on a case-by-case basis. We have multiple investors who cater to Asset Depletion Loan Programs.
Waiting Period After Bankruptcy and Housing Event on Non-QM Loans
There is no waiting period requirements after bankruptcy and/or housing event: Borrowers can qualify with late payments in the past 12 months. Borrowers with credit scores down to 500 FICO are eligible to qualify. Gustan Cho Associates offers Non-QM Bank Statement Mortgages For Self-Employed Borrowers with no income tax returns required. High-end home buyers can qualify with credit scores down to 500 FICO. Borrowers with over 720 FICO can qualify for a 10% down payment Jumbo Non-QM Mortgages.
Mortgage Guidelines on Non-QM Down Payment Requirements
Every investor has their own Non-QM mortgage guidelines. There are no set mortgage guidelines on Non-QM loans like there is with FHA, VA, USDA, and Conventional mortgages. Many Lenders are open-minded when it comes to making exceptions to borrowers who may not meet one or two of their lending requirements.
Each lender can make exceptions if a solid borrower does not meet one or two of their Non-QM mortgage guidelines. Since lenders do not sell these loans to Fannie Mae or Freddie Mac after it funds, mortgage underwriters have a lot of underwriter discretion.
Non-QM loans often have more flexible eligibility criteria, including down payment requirements. Gustan Cho Associates has over a dozen Non-QM Investors. Some borrowers may meet a set of guidelines by one lender but not another. The team at Gustan Cho Associates are experts in putting together a file and making it work for the borrower to get approved and funded.
Non-QM Down Payment Requirements and Interest Rate Pricing
Non-QM down payment requirements is between 10% to 20%. There are many Non-QM mortgage investors so there are not a set Non-QM down payment requirements. The amount of down payment depends on the following factors: Borrowers credit scores. Primary home versus investment home financing. How long has it been since they filed bankruptcy and/or had a foreclosure, deed in lieu, short sale. Type of property.
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Non-QM Down Payment Requirements Versus Mortgage Rates
Mortgage rates depend on the following factors: Borrowers down payment. Borrowers credit scores. Primary home versus investment home financing. How long has the bankruptcy and/or housing event been seasoned. For more information on this blog or other mortgage topics, please contact us at Gustan Cho Associates at 800-900-8569 or text us for a faster response. Or email us at alex@gustancho.com. The staff of Gustan Cho Associates Mortgage Group is available 7 days a week, evenings, weekends, and holidays. The team at Gustan Cho Associates has dozens of lending partnerships with non-QM wholesale lenders.
