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 had 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, and we will also highlight a few key NON-QM loan programs for 2021.
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 (800) 900-8569 or email gcho@gustancho.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 portfolios 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 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 (800) 900-8569 or send an email to gcho@gustancho.com. 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.
