Is Your Client a Candidate for Non-QM Loans?

Borrowers who have been turned down for conventional or government loans frequently believe that their home-buying adventure has come to an end. This is absolutely not the case! Non-QM loans can help borrowers who would otherwise be unable to obtain funding to become homeowners.

A non-qualified mortgage is an alternate option for potential clients who want to buy a property but are concerned that they would not qualify for standard mortgages. A non-qualified mortgage (non-QM) is a form of house loan created for homeowners who do not fulfill the stringent requirements for a normal or traditional mortgage.

Your Client Is A Candidate for Non-QM Loans If They Are:

Self-Employed

Self-employed persons who have been self-employed for less than two years or self-employed individuals with inconsistent income and frequently more than one source of income may be unable to acquire a suitable mortgage. They can choose non-QM loans based on bank statements rather than tax filings.

High Networth Individuals (HNIs)

Those who are ready to take advantage of these loans because their credit ratings are excellent and they want a loan with interest-only payments. Borrowers with a higher-than-average debt-to-income ratio may also be able to pay the mortgage.

Borrowers with Significant Assets

Instead of purchasing a property with cash, these borrowers would prefer to use a non-QM loan to maintain a positive cash flow.

Buyers with Low FICO Scores

Non-QM loans might also help folks who have a solid income but have credit concerns due to unanticipated events. It can also aid those who are facing financial difficulties such as bankruptcy or foreclosure.

Real Estate Investors

Individuals who buy houses to flip for profit or transform into rental properties sometimes prefer non-QM loans because of the speedy reversal or the qualifying revenue that will come from the expected rent.

Foreign Purchasers

Non-QM loans assist borrowers from other countries who do not qualify for a typical loan since they do not have a credit score in the United States. However, in order to qualify for a non-QM loan, these overseas purchasers must have large assets, down payments, and a high income.

Non-QM loan volume in 2021 was $28.6 billion or 0.7% of the mortgage market. The market is booming from estimates ranging from $40 billion (S&P) to $80 billion (Hutchens) this year.

Isn’t It simply a “BAD LOAN” underneath?

No. This is a widespread misunderstanding. AHL Funding offers many Non-QM programs, each with its unique set of fees and conditions. Applicants, like qualifying loan applicants, must go through a complete evaluation procedure to determine their capacity to make future payments effectively. It is a prudent lending method that allows us to accept alternate evidence to pay stubs and W2s.

Find Out More About Non-QM Loans

Whether you’re a novice broker or an experienced one looking to broaden your offerings, a little planning ahead of time will make your home-financing career much more profitable. Learn more from our expert loan officers about how to navigate the home-buying process and assist customers with Non-QM loans.

Want to provide Non-QM loans to your consumers but don’t know where to begin? Apply to become a broker partner today by visiting our broker approval page!