Recent Late Payments Mortgage Guidelines With Non-QM Loans
This BLOG On Recent Late Payments Mortgage Guidelines With Non-QM Loans Was PUBLISHED On May 30th, 2019
Mortgage Borrowers can qualify for traditional government and conventional loans with prior bad credit.
- Outstanding collections and charge off accounts do not have to be paid off to qualify for government and conventional loans
- Home buyers can qualify for mortgages after bankruptcy after meeting the mandatory waiting period requirements
- Repossessions and high-balance charge off accounts do not have to be paid to qualify for home mortgages
- However, recent late payments mortgage guidelines state that borrowers need timely payments in the past 12 months to qualify for government and conventional loans in order to get an approve/eligible per automated underwriting system (AUS)
- Now, borrowers with recent late payments in the past 12 months can qualify for non-QM loans
In this blog, we will discuss Recent Late Payments Mortgage Guidelines with non-QM loans.
What Are Non-QM Mortgages
Non-QM Mortgages are portfolio loans that do not conform to government agency nor conventional lending guidelines.
- There is no waiting period requirements after bankruptcy, foreclosure, deed in lieu of foreclosure, short-sale with non-QM loans
- Benefits of non-QM loans are there are no maximum loan limits
- Borrowers with lower credit scores can qualify for Non-QM Jumbo Loans with credit scores down to 500 FICO
- There is no private mortgage insurance required on non-QM home mortgages
- Non-QM Loans are for both primary, second homes, and investment homes
- Self-employed borrowers with little or no income declared on their income tax returns can qualify for bank statement loans for self-employed borrowers
- 12 months bank statements are averaged to calculate monthly income
- Non-QM Mortgages are not only for borrowers with bad credit
- Many higher income/credit borrowers take advantage of non-QM loans such as bank statement loans for self-employed borrowers
- Down payment requirements on non-QM Loans are 10% to 20% down
- The amount of down payment depends on the borrower’s credit scores, type of property, and longevity of bankruptcy and/or housing event
- Non-QM Mortgage Rates are higher than traditional government and conforming loans
Non-QM Mortgage Rates depends, on the borrowers’ credit scores, the down payment, the type of property, and the longevity after bankruptcy and/or housing event. Non-QM Loans are becoming increasingly popular among home buyers.
Recent Late Payments Mortgage Guidelines Case Scenario
Let’s take a case scenario.
- Let’s say John Smith recently sold his home and made a substantial profit due to the equity he had on this home
- His mortgage loan balance is now paid off and has no mortgage
- However, he had multiple late payments on his mortgage in the past 12 months
- John Smith will have a hard time to qualify for a new mortgage on his next home purchase due to the late payments in the past 12 months on his previous mortgage
- This still holds true even though he sold his home and has his previous mortgage payment paid off
- Recent Late Payments Mortgage Guidelines on government and conventional loans require timely payments in the past 12 months to get an approve/eligible per automated underwriting system (AUS)
- One or two late payments in the past 12 months is not always a deal killer
- However, multiple late payments in the past 12 months will be an issue in getting an approve/eligible per AUS
- The good news is that John Smith can qualify for non-QM Loans with late payments in the past 12 months. 10% to 20% down payment will be required
Non-QM mortgage rates are higher than government and/or conventional loans. After a year, John Smith can refinance the non-QM Mortgage to a traditional government and/or conventional loan.
Borrowers who have more questions on this blog or other mortgage topics, please contact us at Gustan Cho Associates at 262-716-8151 or text us for faster response. Or email us at email@example.com.