Non-qualified mortgages or non-QM

About non-QM loans

Non-Qualified Loans, or Non-QM Loans, offer alternative financing options for those who don’t fit into the traditional lending criteria. Designed to provide flexibility, these loans are ideal for borrowers with unique financial situations.

  • Opportunity to qualify for a mortgage when traditional loans aren’t an option.
  • Solutions for unique or complex financial situations.
  • Potential pathway to property ownership for diverse borrower profiles.
  • Bank Statement Loans: Designed for self-employed borrowers, these loans use bank statements (typically 3, 6, 9, 12 to 24 months) to verify income instead of traditional tax documents.

  • Asset-Based Loans: These loans are based on the borrower’s assets instead of income. Borrowers demonstrate their ability to repay the loan using their liquid assets.

  • Interest-Only Loans: These loans allow borrowers to pay only the interest for a certain period before starting to pay down the principal. This can lead to lower initial payments.

  • DSCR (Debt Service Ratio Loan) Real Estate Investor Loans: Tailored for real estate investors, these loans might use the property’s potential income as part of the qualification process instead of the borrower’s personal income.

  • Foreign National Loans: Aimed at non-resident borrowers who wish to purchase property in the country, these loans often require larger down payments and have higher interest rates.

  • No-Doc/Low-Doc Loans: These loans require minimal documentation of income and assets. They’re often used by borrowers with complex income sources that are hard to document traditionally.

  • Profit and Loss Loan (P&L Loan): A type of financing that is typically used by self-employed individuals or business owners. Unlike traditional loans that rely on documented income through W-2 forms or tax returns, a P&L loan is based on the profit and loss statement of the business

  • Bridge loans: A bridge loan is a short-term financing solution designed to “bridge” the gap between the purchase of a new property and the sale of an existing one. Ideal for homeowners looking to buy a new home before selling their current one, these loans provide fast access to cash, allowing for competitive positioning in the real estate market. Characterized by their short duration, typically up to one year, and secured by existing property equity, bridge loans have higher interest rates than traditional mortgages. They offer a strategic advantage in fast-paced markets, giving buyers the flexibility to act quickly. As a temporary solution, they should be planned with a clear exit strategy, usually the sale of the current home.

  • Non-warrantable Condominium loans: A Non-Warrantable Condominium Loan is a specialized mortgage option designed for purchasing condominiums that do not meet standard warrantability criteria set by Fannie Mae or Freddie Mac. These condos may include features like high rental concentration, smaller condo projects, or certain financial criteria. This type of loan offers flexibility for buyers interested in unique or unconventional condo properties. While the terms and rates may vary from standard loans, reflecting the unique nature and potential higher risk of these properties, Non-Warrantable Condo Loans provide essential financing for buyers who wish to invest in properties that fall outside typical lending guidelines. They are an ideal solution for those looking to purchase in a complex that doesn’t qualify for traditional financing.

Why consider a non-QM loan?

Non-QM loans allow you to use assets or money in investments without touching those funds. We have a calculation that gives us an income amount based on the amount you have invested, and you don’t have to have a job or other steady source of income. The key for all of these is the Ability to Repay (ATR). Foreign National Mortgage Loans also fall under Non-QM. There are many other variations too. Bad credit, one day out of bankruptcy, one day out of foreclosure, and more.