This Article Is About Non-QM Mortgages Versus Government And Government Mortgages
If you are in the market for a mortgage loan, you may have realized it is hard to qualify if you have any derogatory items in the past.
- Many of our clients do not fit your everyday Fannie Mae, Freddie Mac, or FHA / VA mortgage guidelines
- The good news is Gustan Cho Associates have a full line of NON-QM mortgage products that may fit your needs
- This is a great time to buy a refinance of the property
- We specialize in unique mortgage situations
- In this blog, we will detail what a NON-QM mortgage loan means and how you can apply for a NON-QM mortgage loan with Gustan Cho Associates
- We will also highlight a few key NON-QM loan programs for 2021
In this article, we will discuss and cover Non-QM Versus Government And Conventional Mortgages.
Popularity Of Non-QM Versus Government And Conventional Mortgages
NON-QM mortgage lending is more popular now than it’s ever been.
- NON-QM mortgage loans were gaining popularity before the COVID-19 coronavirus outbreak
- During the start of the COVID-19 lockdown, many NON-QM lenders stopped their current mortgage products
- Unfortunately, we have lost a few key programs such as the 5% down payment jumbo mortgage
- However, we expect this program to roll back out soon
- As the United States and the world recover from the COVID-19 coronavirus outbreak, we are starting to see more NON-QM mortgage products introduced
We have seen credit score and down payment requirements loosen over the past few months, making NON-QM a more viable loan option for thousands of Americans.
Eligibility Requirements On Non-QM Versus Government And Conventional Mortgages
Applying for a NON-QM loan with Gustan Cho Associates is an easy process.
First, you will reach out to Mike Gracz on 630-659-7644 or email email@example.com.
- Mike will be able to go over all NON-QM products available for your situation
- After a brief discussion and making sure a NON-QM mortgage product is the right option for you
- Mike will pair you with a licensed loan officer in your state
- You will then fill out an online mortgage application that allows your loan officer to verify your credit report
- Depending on the program you’re seeking, your loan officer will request specific documentation from you
- Many times, your situation will be run past the NON-QM mortgage team for qualification
You will then be issued a pre-approval letter or start the refinance process.
Mortgage Process On Non-QM Versus Government And Conventional Mortgages
The overall loan process is very similar between a standard mortgage (QM MORTGAGE) and a custom portfolio loan.
After the initial application/ pre-approval process, you will then put an offer in on a home.
- Once that offer is accepted (or you are starting the refinance process), an appraisal will be ordered
- Your loan will go through the processing and underwriting process just like a standard mortgage
- At the closing table, you sign all of the same documents plus a few additional NON-QM-specific loan disclosures
- A NON-QM loan may be the difference between you owning a home and continuing to rent
We encourage you to reach out and apply as soon as possible while rates remain at all-time lows.
2021 Non-QM Mortgage Loan Program Updates
Below are some details for the most common NON-QM products used in 2021:
- Bank statement mortgages for self-employed borrowers
- This is a staple of NON-QM lending
- Millions of Americans are self-employed and utilize tax deductions when filing federal income taxes
- This is their right based on their business procedures
- However, when it comes time to qualify for a mortgage, the major agencies have very strict income requirements based on federal IRS tax returns for self-employed borrowers
- If you are self-employed, you more than likely take every right off you possibly can
- This minimizes your federal tax burden at the end of each tax season
- This does hurt your chances of applying for a conventional, FHA, or VA mortgage loan
- This is a situation where a NON-QM bank statement loan can help you achieve homeownership
- Income is based on business-related deposits into your bank statements and not your IRS tax returns
- In fact, we do not need a copy of your tax returns for a bank statement loan
- The general rule of thumb is an underwriter will count 50% of business deposits and the other 50% of deposits are assumed to be business-related expenses
- If you feel like half of your business deposits will be enough income to qualify for a home, we encourage you to reach out today
- There are numerous different bank statement loans and credit scores start around 640 to enter into a bank statement loan
- Down payment or as little as 10% and is also based on credit score
If you have a recent foreclosure or bankruptcy, you may need a larger down payment. Call in today for a specific quote!
Buying Investment Properties With Non-QM Versus Government And Conventional Mortgages
NON-QM also has great investment loan opportunities.
- If you are a real estate investor and have numerous mortgages, you may want to look into a low document NON-QM mortgage loan for investment properties
- If you’re buying an investment property, a NON-QM mortgage loan will offer you the opportunity to buy a home without getting income documents in the mix
- As long as the fair market rent (calculated by the appraiser) of the investment property covers the NON-QM mortgage payment (including principal, interest, taxes, insurance, and any homeowner’s association dues), we are able to fund that mortgage transaction
- This is a great opportunity for real estate investors to build their real estate owned portfolio and generate more rental property income
- These mortgage products have a 20% to 25% down payment requirement based on credit score
It’s a great opportunity to become a real estate investor and add to your passive income.
Non-QM Jumbo Loans
NON-QM jumbo mortgage products.
NON-QM mortgage loans are very prominent in jumbo mortgage lending.
- Many individuals who have had derogatory credit items in the past such as a foreclosure or even mortgage late payments may still qualify for a NON-QM jumbo loan
- A NON-QM product can be the fastest way to get into a jumbo mortgage
- Most standard jumbo products have a long seasoning requirement from any derogatory credit occurrences
- Some as long as eight years
- A jumbo NON-QM mortgage can get you into a home just two years after a foreclosure
- If you are interested in a jumbo mortgage or are located in a high balance area, a NON-QM mortgage loan may be best for you
- A NON-QM jumbo mortgage will allow bank statement income to be used
This opens the door to jumbo financing for many self-employed borrowers.
Qualifying For The Non-QM Mortgage Process
As you can see from this blog, Gustan Cho Associates are experts in NON-QM mortgage lending. If you have a scenario that does not fit your average mortgage lending criteria, please reach out to the experts. Please call Mike Gracz on 630-659-7644 or send an email to firstname.lastname@example.org. We are available seven days a week and will respond to you as soon as possible. As we start to see more NON-QM mortgage products roll out, we will continue to update our readers. We look forward to answering any questions you have surrounding mortgages.