UPDATED Non-QM Guidelines POST Coronavirus Outbreak

UPDATED Non-QM Guidelines POST Coronavirus Outbreak

Gustan Cho Associates are mortgage brokers licensed in 48 states

This guide covers the updated non-QM guidelines post-coronavirus outbreak and political scare. Non-QM guidelines are not uniform agency lending guidelines like government and conventional loans. The individual wholesale lender sets Non-QM guidelines. Just because one lender has a set of non-QM guidelines does not mean another will have the same lending requirements. The post-coronavirus updated Non-QM guidelines constantly change as the weeks pass.

Non-QM loans were one of the hottest home mortgage programs in the housing market before the coronavirus outbreak. Non-QM loans are alternative types of home financing for borrowers who do not qualify for government and conventional loans. Non-QM loans are not just for homebuyers or homeowners with bad credit. There are borrowers with great credit and credit profiles who benefit from non-QM loans.

The rumors that non-QM loans were dead and would never come back proved false. The team at Gustan Cho Associates is thriving with the flood of non-QM mortgage loan applications. Not all of the mortgage products are back.  However, our investors are lifting the restrictions as time passes. The non-QM lending programs at Gustan Cho Associates are expected to return in full force in the coming weeks. The following paragraphs will cover updated non-QM guidelines post-COVID-19 ERA.

UPDATED Non-QM Guidelines POST Coronavirus Outbreak

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There are many benefits to alternative home mortgages. Non-QM mortgages give mortgage borrowers who need alternative financing the chance of becoming homeowners sooner than later. This section covers mortgage borrowers who benefit from non-QM financing.

Borrowers who cannot meet the mandatory waiting period after bankruptcy or a housing event such as a foreclosure, deed-in-lieu of foreclosure, or short sale. Non-QM lenders generally do not have a minimum waiting period after bankruptcy or a housing event. Bank statement mortgage loans for self-employed borrowers with no income tax returns required. Late payments, including late mortgage payments, in the past 12 months.

Borrowers who exceed the maximum government or conventional loan limits. There is no maximum loan limit on non-QM mortgages. There is no private mortgage insurance. Non-QM mortgages exempt deferred student loans for longer than 12 months. Borrowers with credit scores down to 500 FICO. Jumbo loans with lower credit scores and bad credit. Since non-QM mortgages are portfolio loans, each lender has its guidelines. Most lenders will negotiate or make exceptions on a case-per-case file. Lenders can and are willing to make exceptions if the deal makes sense.

Non-QM Guidelines After Bankruptcy and Foreclosure

If you’ve recently gone through bankruptcy, you again might be wondering if you’ll ever be able to get a loan. The amazing news is that getting approved for a mortgage after bankruptcy or a housing event is not impossible. Here are some solid tips on improving your chances of getting approved. One of the best ways to increase your odds of getting approved for a mortgage after bankruptcy is to meet government or conventional loans’ minimum waiting period requirements. Or find someone without a prior bankruptcy or foreclosure to be on the loan, and you be on title together with the main borrower. You can cut the waiting period to one year after bankruptcy or foreclosure on non-QM loans, explains John Strange of Gustan Cho Associates:

FHA, VA, USDA, and conventional loans require a two to four year waiting period after bankruptcy. Non-QM loans allow borrowers one year out of bankruptcy or foreclosure to qualify for Non-QM loans.

Updated non-QM guidelines post-COVID-19 ERA that changed for the worse is the non-QM loans one day after bankruptcy and foreclosure. The no waiting period after bankruptcy and foreclosure non-QM guidelines has been changed to one year after bankruptcy and foreclosure by most non-QM wholesale mortgage lenders. The updated non-QM guidelines on non-QM loans after bankruptcy or a housing event may return someday with no waiting period. However, most wholesale lenders now have a one-year waiting period after bankruptcy or a housing event. A housing event is a foreclosure, a deed-in-lieu of foreclosure,  or a short sale.

Non-QM Mortgage Post Coronavirus Pandemic
Non-QM Mortgage Post Coronavirus Pandemic 

The coronavirus pandemic has devastated the mortgage markets. At least temporarily. Non-QM mortgages have been halted until further notice by all lenders. Many borrowers who had locked their non-QM mortgage rates and were set to close have seen their dream of homeownership halted until further notice. John Strange, a senior loan officer at Gustan Cho Associates, shares his throughout about the updated non-QM guidelines on non-prime loans after the coronavirus outbreak and scare as follows:

The team at Gustan Cho Associates had over 40% of its pipeline canceled due to the coronavirus pandemic crisis. A handful of non-QM lenders either closed their doors or went bankrupt. The future of alternative financing seemed gloomy and not too promising. As time passed, the good news is that non-QM lending is returning.

Lending guidelines are easing up as time passes. If the deal makes sense, lenders are willing to make an exception to make the deal work. Gustan Cho Associates is an aggressive lender of non-traditional mortgages. Gustan Cho Associates has recently launched home mortgages with one day out of bankruptcy or foreclosure.

Best Non-Traditional Lenders With Lenient Non-QM Guidelines

Qualifying For A Mortgage With A Lender With No Overlays And Who Are Experts In Non-Traditional MortgagesOver 80% of our borrowers at Gustan Cho Associates could not qualify at other lenders due to their lender overlays. Gustan Cho Associates has no lender overlays on government and conventional loans. We are also experts in originating and funding non-QM mortgages and alternative portfolio lenders.

Non-QM lenders were anticipating skyrocketing growth in the years to come. However, the COVID-19 pandemic completely shut down the mortgage markets on non-QM and alternative portfolio financing. The great news is that non-QM loans have been making a resurgence in the past couple of months.

To qualify for a mortgage with a lender with no lender overlays and experts in alternative financing, please get in touch with us at Gustan Cho Associates at 800-900-8569 or text us for a faster response. Or email us at gcho@gustancho.com. The team at Gustan Cho Associates is available seven days a week, evenings, weekends, and holidays.

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