Non-Qualified Mortgage Products And Lending Guidelines

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Non-Qualified Mortgage Products And Lending Guidelines

This Article On Non-Qualified Mortgage Products And Lending Guidelines Was UPDATED On September 22nd, 2018

There has slowly been a recent trend creeping back into the market regarding non qualified mortgage products.
  • These products are mortgage loans not sold to the government on the secondary market place
  • Hence not subject to certain debt to income criteria and federal mortgage lending guidelines
  • Non-Qualified Mortgage Products  does not have to meet government guidelines imposed on mortgage lenders to adhere to or be forced to pay fines and or repurchase loans

How Do Non Qualified Mortgage Products Work

Some of these mortgages are CRA related:
  • In other words, they require the banks to do a certain number of loans in the community they are branched in
  • Those mortgage loans may have the following issues:
    • recent bankruptcy
    • high debt to income due to the person being self employed
    • or the spouse cannot be on the loan due to low credit scores
  • One other aggressive criteria returning is the ITIN program, which allows people who are undocumented but pay taxes through a social given to them for filing purposes(usually begins with a 9 or a 5)
  • The people who met this criteria may be able to buy with a decent down payment
  • Rates on all mortgages are higher than standard market
  • Some may be on ARM, not 30 year fixed rates
  • It does show Wall Street and community lending is making a comeback

Drawbacks Of Non Qualified Mortgage Products

Some potential pitfalls to the mortgage lending market include but not limited to: rising cost of lending due to compliance.
  • This will rise the cost to the borrower, and slow the process down for them
  • The CFPB (consumer financial protection bureau) answers to no one
  • They are heavily funded through fines and punishments they impose
  • CFPB rewards whistle blowers
  • Spreads on bonds are very low right now
  • Rates have benefited as a result
  • Fence sitters should take comfort in borrowing money
  • But be aware low inventory will continue to raise prices higher than normal
  • So buy now before everyone else jumps in come warmer weather

Non-Qualified Mortgage Products Offered Today

Non-Qualified Mortgage Products is often referred to as non-qm loans and bank statement loans for self employed borrowers.

  • Gustan Cho Associates Mortgage Group at Loan Cabin Inc. offers non-qm loans where there is no waiting period after a housing event or bankruptcy
  • Home buyers can qualify for non-qm loans one day out of foreclosure and/or bankruptcy
  • 10% to 20% down payment is required
  • The amount of down payment depends on borrowers credit scores
  • Mortgage rates depends on the down payment the buyers puts down and the borrowers credit scores
  • There is no private mortgage insurance premium with non-qm loans
  • There are no loan limits
  • Bank statement loans for self employed borrowers do not require income tax returns
  • Self employed borrowers can qualify for mortgage, especially jumbo loans, with no tax returns
  • We average 24 months bank statement deposits and use the monthly average over 24 months as income
  • Debt to income ratio can be up to 50% DTI
  • There is no loan limit caps
  • 10% to 20% down payment is required
  • Debt to income ratios can be as high as 50%

Call or text us at 262-716-8151 or email us at gcho@gustancho.com for more information on our non-qm loan programs and bank statement loan for self employed borrowers.

About The Author

Ron Granado is a senior writer for Gustan Cho Associates Commercial And Residential Mortgage Information Center and a veteran title expert. Ron Granado is associated with Plymouth Title Guaranty Corporation based in Oak Brook, Illinois and is an expert in all areas of commercial and residential title policies and how title work. Ron Granado is a consultant to many real estate attorneys, real estate agents, mortgage professionals, mortgage lenders, banks, credit unions, and consumers. If you have any questions on property title or need the best title officer to represent your real estate transaction, contact Ron Granado on the number below. We will forward to the many articles Ron Granado will be publishing in the coming weeks. Stay tuned!!!

Ron Granado

Account Executive | Plymouth Title Guaranty Corp

1301 W. 22nd Street | Ste 505 | Oak Brook, IL 60523

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