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Non-QM Down Payment Requirements For Home Buyers

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Non-QM Down Payment Requirements For Home Buyers

This BLOG On Non-QM Down Payment Requirements For Home Buyers Was Published On August 6th, 2019

Non-QM Down Payment Requirements
Gustan Cho Associates

Non-QM Loans are becoming increasingly popular for home buyers 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 and/or bankruptcy
  • Homebuyers do not have to wait after bankruptcy and/or housing event anymore during this rising housing market with Non-QM Mortgages

Two of the most common inquiries we get daily by our borrowers are the following:

In this blog, we will discuss Non-QM Down Payment Requirements and the benefits of Non-QM Loans.

What Are Non-QM Mortgages

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 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

Asset Depletion Mortgages With Non-QM Loans

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

what is the Waiting Period After Bankruptcy And Housing Event On Non-QM Loans

There is no waiting period requirements after bankruptcy and/or housing event:

Borrowers with over 720 FICO can qualify for 5% down payment Jumbo Non-QM Mortgages.

Non-QM Mortgage Guidelines

what are Non-QM Mortgage Guidelines

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 and/or Freddie Mac after it funds, mortgage underwriters have a lot of underwriter discretion
  • Gustan Cho Associates has over a dozen Non-QM Investors
  • Some borrowers may meet a set of guidelines by one lender but not another
  • We are experts in putting together a file and making it work for the borrower to get approved and funded

We will discuss general Non-QM Mortgage Guidelines and Non-QM Down Payment Requirements in this blog.

Non-QM Down Payment Requirements And Interest Rate Pricing

what are 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

Non-QM Mortgage Rates Versus Traditional Rates

what is the Non-QM Mortgage Rates Versus Traditional 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 and/or other mortgage topics, please contact us at Gustan Cho Associates at 262-716-8151 or text us for faster response. Or email us at gcho@loancabin.com. The staff of Gustan Cho Associates Mortgage Group is available 7 days a week, evenings, weekends, and holidays.

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