NON-QM Loans And Guidelines On Purchase And Refinance Transactions


This ARTICLE On 2020 NON-QM Loans And Guidelines On Purchase And Refinance Transactions Was PUBLISHED On January 7th, 2020

What are NON-QM's loans and guidelines regarding purchase and refinancing transactions

Gustan Cho Associates are very optimistic about 2020.

  • There have already been some exciting announcements in the mortgage industry
  • We expect 2020 to be busy especially when it comes to NON-QM mortgage lending
  • Since all of the major lending agencies such as FREDDIE MAC, FANNIE MAE, USDA, FHA, and VA are currently overseen by the federal government, guideline requirements have become strict
  • This can affect your ability to qualify for a mortgage
  • If you have had trouble in the past with derogatory credit issues such as a foreclosure, you may want to look into a NON-QM mortgage loan
  • In this blog, we will detail what a NON-QM mortgage loan means, some of the new loan products for 2020, and how to apply for a NON-QM mortgage with Gustan Cho Associates

In this article, we will cover and discuss the 2020 NON-QM Loans And Guidelines On Purchase And Refinance Transactions.

NON-QM Loans And Guidelines Versus Qualified Mortgages

A NON-QM mortgage loan stands for a non-qualified mortgage. A QM MORTGAGE is overseen by the major agencies.

  • For example, FHA, conventional, USDA, and VA mortgage are considered qualified mortgages
  • These have very cut and dry mortgage guidelines that must be met
  • Some of these mortgage guidelines have 7-year time requirements before being able to apply for a qualified mortgage
  • Now that you understand what a qualified mortgage is, a NON-QM mortgage is simply outside of that realm
  • Yes, a NON-QM mortgage does have its own set of guidelines, but they are much more lenient
  • Especially when it comes to derogatory credit events such as a foreclosure, deed-in-lieu, or short sale
  • You can be one day out of foreclosure and still qualify for a NON-QM mortgage
  • NON-QM mortgage loans are nothing new, they’ve been around for years
  • Thousands of Americans have already utilized them to purchase or refinance their properties

This a great tool to build equity and not make a landlord rich.

UPDATED Non-QM Loans And Guidelines And New Products

What are loans and guidelines outside QM and new products

New NON-QM loan products for 2020.

  • 85% LTV cash-out refinances; In 2019, both FHA and VA lowered their maximum loan-to-value (LTV) requirements for cash-out refinance mortgage loans
  • Now only a veteran can use a qualified mortgage to get more than 80% loan-to-value out of their property during a cash-out refinance
  • So, if you are not a veteran, even with an FHA loan, you are limited to 80% loan-to-value
  • That’s where this NON-QM mortgage loan can really help. NON-QM still allows 85% loan-to-value cash-out refinance mortgage transactions
  • This extra 5% can help you pay off debt, help pay for your kids’ college, complete home repairs, and even fund investment opportunities

While the loan-to-value requirements are put in place to protect your house from equity stripping, these refinance transactions can put thousands of Americans in a better overall financial situation.

Unique And Alternative Non-QM Mortgages

Platinum NON-QM products. In the last few months of 2019, a few of our NON-QM investors have started introducing PLATINUM NON-QM mortgage products. The rates aim to be closer to conventional mortgage rates for high credit score borrowers who may not qualify for a conventional mortgage

Besides competitive interest rates, these loans allow a large number of Americans to enter mortgage financing where they may not be able to with Fannie Mae or Freddie Mac guidelines.

  • Up to 90% LTV with 680 Credit Score 
  • Max Cash out up to $1 Million
  • 12 or 24 Months Bank Statements can be used for income
  • 1-year documentation program available (W2 or tax return)
  • ARM, FIXED, or Interest Only Options available 
  • Cash-out funds can be used for reserves
  • Credit/Life event seasoning 4 yrs
    • short sale, foreclosure, deed-in-lieu, loan modification, and 120-day mortgage lates
  • Jumbo loan amounts up to $ 2.5 M
  • DTI Up to 50%

Non-QM Loans Where No Income Tax Returns Are Required

What can be other loans other than QM, in which income tax refunds are not required

We still have all of our other than NON-QM mortgage products available.

  • Everything from bank statement loans, one-year tax return loans, investment property loans, Fix and Flip mortgages, and more
  • We have a Full Slate of NON-QM loan products that most lenders do not offer
  • If you are having trouble qualifying for a mortgage, please give us a call

We would love to help you with your NON-QM mortgage needs.

Pre-Payment Penalty On Non-QM Loans

A frequently asked question about NON-QM mortgage loans; Is there a prepayment penalty? If the NON-QM mortgage loan is on a primary residence, there is no prepayment penalty. Depending on the loan product, there can be prepayment penalties for investment properties or second homes for a NON-QM mortgage. Usually no longer than two to three years. This is an important question to ask. Many borrowers are only in a NON-QM mortgage loan for six months to a year. Gustan Cho Associates complete numerous NON-QM mortgage loans and help refinance our clients out of them as soon as possible. Please call Mike Gracz on 630-659-7644 to discuss refinance options down the road.

Gustan Cho Associates are specialists in NON-QM mortgage lending. We are also specialists in FHA, VA, and conventional mortgage lending. 75% of our clients have either been denied by their current lender or not getting the customer service they expect. If you have any mortgage questions, please contact Mike Gracz on 630-659-7644.

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