NON-QM Loans With Recent Credit Event On Purchase And Refinance


This BLOG On NON-QM Loans With Recent Credit Event On Purchase And Refinance Was PUBLISHED On March 17th, 2019

Mortgage borrowers can qualify for home loans with prior bad credit but need to have been timely on all of their payments in the past 12 months.

  • Borrowers can qualify for home loans after bankruptcy, foreclosure, short sale, and deed in lieu of foreclosure
  • However, government and conventional loans require a mandatory waiting period after the credit event
  • The good news we have is that Gustan Cho Associates now offers non-QM loans with recent credit event
  • This holds true for both purchase and refinance transactions

We will cover NON-QM Loans With Recent Credit Event and what type of borrowers can benefit from this loan program. 

What Are Examples Of Recent Credit Events?

Recent credit events are the following:

  • Foreclosure, deed in lieu of foreclosure, short-sale that has not been seasoned three years
  • Recent late payments in the past 12 months on credit tradelines
  • Bankruptcy in the past two years
  • Recent collections/charge-offs
  • Other extenuating circumstances leading to late payments and not paying bills on time

The above extenuating circumstances happen to the best of us. Divorces can be brutal. The majority of folks who go through a recent divorce often have their credit bruised. Death in the family is another extenuating circumstance that affects household income and credit. Job loss, business loss, and company takeovers are other reasons. Regardless of the reason, the good news we have is that we now offer NON-QM Loans With Recent Credit Event. Until now, borrowers with recent late payments could not have qualified for a mortgage. With our new NON-QM Loans With Recent Credit Event, borrowers can qualify for a home loan now rather than later. Once they have their credit re-established, we can then refinance them into a traditional government and/or conforming loan.

Types Of Borrowers Who Can Greatly Benefit From NON-QM Loans With Recent Credit Event

Home prices are rising in all areas of the United States. The Federal Housing Finance Agency (FHFA) increased conforming limits to $484,350 on conventional loans. FHFA increased conventional loan limits for three years in a row due to rising housing prices. HUD, the parent of FHA, followed FHFA lead and raised FHA Loans Limits to $314,827 for 2019. Again, HUD increased FHA Loan Limits for three years in a row due to rising home prices. Mortgage rates keep on rising to the great economy. With rates still rising, the housing demand remains high. There does not seem a housing correction is going to happen in the near future. All statistics and economic data suggest that housing prices will continue to climb. Many home buyers who recently had a housing event or recent credit event cannot take advantage of the housing boom with traditional government and conventional loans. Now with NON-QM Loans, these types of home buyers can qualify for a mortgage and do not have to wait many years when they are priced totally out of the market.

NON-QM Loans With Recent Credit Event Such As Recent Divorce

On the refinance side, many homeowners enjoyed their homes appreciate in recent years due to the housing boom.

  • However, most divorces can affect people’s credit
  • There are instances where one spouse will get the home but only has a certain amount of time to get their names out of the mortgage note
  • With non-qm loans, homeowners with recent bad credit can qualify for a cash-out refinance
  • The amount of cash-out is dependent on the equity homeowners have in their homes
  • On the flip side, homeowners with recent credit events due to a divorce may want to purchase a new home rather than rent
  • Cases like these often happen where people need to purchase versus renting due to having children or many pets

Again, home buyers with recent credit events can now qualify for non-qm loans rather than waiting years to qualify for government-backed and/or conventional loans.

NON-QM Loans With Recent Credit Event Mortgage Guidelines

Non-QM Loans are becoming increasingly popular.

Basic eligibility requirements are as follows:

  • No waiting period after housing event
  • No waiting period after bankruptcy to qualified individuals
  • 10% to 20% down payment is required
  • Amount of down payment depends on borrowers credit scores and the longevity of credit event
  • Mortgage rates depend on borrowers credit scores, down payment, and longevity of credit event
  • There is no loan limit
  • There is no private mortgage insurance required
  • Bank statement loans for self-employed borrowers available

For more information on our non-QM loans with recent credit events, please contact us at Gustan Cho Associates at 262-716-8151 or text us for faster response. Or email us at

Special thanks to our SVP Dale Elenteny and NON-QM Investor Jack Kotowski for their video/blog presentation to educate our loan officers and our viewers. If you like to contact Dale Elenteny directly, you may call or text him at 630-479-2719. Or email Dale at 

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