This Article Is About NON-QM Versus Traditional Mortgage Performance
On this BLOG, we will compare NON-QM Versus Traditional Mortgage performance rates. Statistics on NON-QM Versus Traditional Mortgage provide data that non-QM loans are performing better than traditional government and conforming loans. NON-QM Loans are alternative portfolio loans. These loans are for use by borrowers who do not meet government and conforming mortgage guidelines. NON-QM Loans are not just for borrowers with bad credit. Many borrowers can benefit from non-QM and bank statement loans for self-employed borrowers There are no maximum loan limits, no private mortgage insurance required, and have negotiable terms. By negotiable terms, exceptions can be made in a case-by-case scenario.
Updated Non-QM Mortgage Loan Programs
NON-QM Loans, launched in 2015 by most lenders, has been a hit from day one. More and more products are coming out. We will discuss the future of non-QM versus traditional mortgage loans on this blog. Gustan Cho Associates recently launched our Asset-Depletion Mortgage, investor cash-flow mortgages, investment property loans, and fix and flip loan programs. In this article, we will discuss and cover NON-QM Versus Traditional Mortgage Performance,
Who Benefits From NON-QM Versus Traditional Mortgage
Borrowers who could not meet government and conforming guidelines now can qualify for alternative financing.
NON-QM Loans has the following benefits:
There is no waiting period after bankruptcy, foreclosure, deed in lieu of foreclosure, short sale There is no maximum loan limit. No private mortgage insurance. Down payment requirements are 10% to 20% down payment. The amount of down payment depends on the borrower’s credit scores. Mortgage rates depend on the down payment, credit scores, and other factors like the longevity of previous housing events and/or bankruptcy. We do have 95% LTV Non-QM Jumbo Mortgages for W-2 wage earner borrowers with 720 credit scores with no private mortgage insurance. Bank statement loan programs for self-employed borrowers with no income tax returns required.
NON-QM Versus Traditional Mortgage Guidelines
One major difference between NON-QM Versus Traditional Mortgage is NON-QM requires a larger down payment. The non-QM mortgage guidelines will be listed as follows. 10% to 20% down payment. Down Payment requirements depend on the borrower’s credit scores. Mortgage interest rates depend on credit scores and down payment. Bank statement loans for self-employed borrowers require verification of rent and 3 seasoned credit tradelines. Credit scores down to 500 FICO. No private mortgage insurance and no maximum loan limits. Borrowers can buy down mortgage rates by paying discount points. For primary homes, second homes, and investment properties. Investment homes can close under the name of a Limited Liability Company (LLC). Alternative Financing Programs are becoming increasingly popular.
Performance Of NON-QM Borrowers
A recent survey of non-QM investors found that non-QM loans perform substantially better than government and conventional loans. One investor, in particular, closed and funded 11,000 loans in the past five years. Out of the 11,000 loans funded, only 8 cases of default/foreclosure happened. Other investors have similar performance rates. Due to the high performance of non-QM borrowers, more lenders are launching non-QM mortgages. We see a great market that is up and coming with reasonable mortgage rates.
March 17, 2021 - 3 min read