Non-QM Versus Government And Conventional Mortgages

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

The difference between non-QM mortgage loans and 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

  • 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

What are the updates to the non-QM mortgage program until 2021?

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

How to qualify for a 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 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.

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