What You Need to Know About Non-Qualifying Mortgages

• ByAHL Funding
what you need to know about non-qualifying mortgages

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The non-QM loan has emerged as the new buzzword. It seems that all lenders are now offering a trendy new Non-QM solution and encouraging non-QM loan programs for brokers. As non-QM loans become more popular, it’s a fantastic time for brokers to step in and expand their company by offering a broader range of loan options.

If you want to buy a house but are concerned about your ability to qualify for a regular mortgage, a non-qualified mortgage is an option. In this section, we’ll explain how a non-qualified mortgage works and help you determine if a non-qualified loan program is good for you.

The Rise of Non-QM Loan Programs for Brokers

What happens if a self-employed contractor with millions of dollars does not qualify for a qualifying mortgage because he has the necessary documentation? Shouldn’t a person with a ten-million-dollar net worth and impeccable credit be an ideal borrower? Brokers and the financial markets have begun to service these people and fill the gaps in the last three years. Capital markets have grown more comfortable with non-QM loan programs, and brokers have gotten better at implementing fair mechanisms to evaluate the borrower’s capacity to repay. In short, the non-QM loan program for brokers is the top priority.

Non-QM Market Post Covid

The non-QM sector saw a hiatus in the secondary market last year. This was because of the COVID-19 epidemic and the belief that the economy would experience turmoil.

Some investors believed that the housing market, in particular, would bear the brunt of the damage and that, because non-QM loans had not been tested in difficult times, it was uncertain how they would fare.

Government assistance did arrive to support the economy, and it undoubtedly contributed to the avoidance of another financial catastrophe. However, investors realized that non-QM loans were produced using solid underwriting standards and that their purpose filled a much-needed hole in the housing market.

The secondary market is presently hungry for these loans, and borrowers who would not have been able to buy or refinance a property in the past owing to rigorous agency requirements are now able to participate in the housing market thanks to non-QM loans.

Know Your Products

The most difficult challenge for brokers is not understanding which sorts of loans fall into the non-QM realm. Agency loans have highly stringent standards, and in many cases, borrowers with unusual situations who are a “near miss” with regular loans fall short of qualifying. The inflexibility of agency loans also affects many self-employed borrowers.

Many brokers are finding that these non-traditional products not only augment their existing business but also extend the consumer base they can service in their areas.

Reaching New Borrowers With Non-Qm Loan Programs 

Many brokers and loan officers are familiar with a business strategy in which leads are generated and followed up on. Brokers must now start thinking a little outside the box.

Brokers can reach more new consumers with non-QM loan programs by targeting the right people on networks like LinkedIn and reaching out to new connections at conferences.

Partner with a Non-QM Specialist

Brokers should work with a professional and specialist non-QM lender to ensure they are well-educated on the non-traditional products available in the market.

The ultimate aim that all lenders aspire to is speed, comfort, and convenience, but at AHL Funding, it’s ingrained in every employee’s DNA, and this common purpose has driven us to become one of the best non-QM lenders in the country. AHL Funding specializes in non-QM loans and works with brokers in a variety of states.

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