If your financial situation doesn't fit the traditional mortgage criteria, a Non-Qualified Mortgage (Non-QM) might be a viable option. These loans offer flexibility for individuals whose income or credit history falls outside the standard guidelines.
A Non-Qualified Mortgage (Non-QM) does not adhere to the consumer protection requirements established by the Dodd-Frank Act. Unlike Qualified Mortgages (QM), which have strict criteria, Non-QM loans offer more flexibility for borrowers with unique financial situations. For instance, if your debt-to-income ratio exceeds 43% or you have irregular income that doesn't meet traditional verification standards, a Non-QM loan may be an appropriate solution.
Non-QM loans can be beneficial for various types of borrowers who might not qualify for a conventional mortgage:
Self-Employed Borrowers: Traditional mortgage programs often require extensive documentation of self-employed income. Non-QM lenders might offer bank statement loans, allowing you to qualify based on your bank statements instead of tax returns.
High Net-Worth Individuals: If you have substantial assets but less regular income, an asset depletion loan might be available. This approach allows you to qualify by dividing your asset balance by a predetermined period to calculate qualifying income.
Real Estate Investors: For investors owning more than ten financed properties, or those seeking debt-service coverage ratio loans, Non-QM options may provide a suitable alternative to conventional lending limits.
Borrowers with Recent Bad Credit: Non-QM loans can sometimes be accessed shortly after major credit events like bankruptcy or foreclosure, whereas traditional lenders often require a waiting period of two to seven years.
Foreign Nationals: If you're a foreign national working or vacationing in the U.S., Non-QM loans may not require U.S. income proof, credit history, or a Social Security number.
Interest-Only Payment Options: Non-QM loans may offer interest-only payment options, which can be advantageous for individuals with fluctuating income, providing lower payments during less financially stable periods.
A Non-QM loan can be a practical choice if you have the financial capacity to make regular payments but don't fit the traditional mortgage criteria. For instance, if you own a business with variable income and have a strong credit score but struggle to meet conventional income verification requirements, a Non-QM loan may be the solution.
By opting for a Non-QM loan, you can access financing tailored to your unique financial circumstances, bridging the gap until you can meet conventional mortgage standards or refinance into a traditional loan.
If you think a Non-QM loan might be right for you, our team is here to help. Contact us to explore your options and find the best solution for your financial needs.
Our lending solutions use the perfect hybrid of human-driven insights and technical prowess to process loans faster and significantly reduce costs.
Effective Date: 9/1/2021
All loan approvals are conditional, not guaranteed, and subject to lender review of all information. A loan is conditionally approved when the lender has issued an approval in writing, but until all conditions are met, a loan cannot be funded. Specified rates may not be available for all borrowers. interest rates, and program guidelines, and are subject to change without notice based on applicant’s eligibility and market conditions. Suncoast Mortgage Firm LLC. is an Equal Opportunity Mortgage Broker headquartered in Tampa, Florida. This licensee is performing acts for which a mortgage broker license is required. Suncoast Mortgage Firm LLC. is licensed by the Florida Office of Financial Regulation, NMLS# 1936558. Suncoast Mortgage Firm LLC. is approved to originate Conventional, FHA, VA, and USDA loans, and has the ability to broker such loans to Conventional, FHA, VA, and USDA approved lenders. Suncoast Mortgage Firm LLC. is not acting on behalf of or at the direction of HUD/FHA or the VA.
