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Non-QM Mortgage Loans & Alternative Lending 

A Non-Qualified Mortgage (Non-QM) is any home loan that doesn’t comply with the Consumer Financial Protection Bureau’s existing rules on Qualified Mortgages (QM). Non-QM mortgage loans can fill the niche for those who don’t necessarily fit into the “qualified-mortgage box.” A qualified mortgage follows rules set by the CFPB and Federal Government; however, a Non-QM loan use alternate methods of income verification to help you get approved for a mortgage loan. Usually this type of mortgage loan accommodates people who are not able to prove they are capable of making the mortgage payments. First and foremost, a non-QM loan is not inherently high-risk. It is simply a loan that doesn’t fit into the complex rules associated with QM. In fact, many of these loans will actually require higher FICO scores, along with other strong borrower attributes like steady jobs and plentiful assets. However, because of the rules and scrutiny associated with non-QM mortgage lending, banks will probably keep them on their own books instead of selling them off to investors on the secondary market.

Who Benefits From Non-QM Mortgage Loans

  • Self-employed borrowers –  are often paid sporadically and have more than one stream of income, which makes it difficult for them to obtain a qualified mortgage.  These individuals typically turn to loans based on their bank statements as opposed to their W2s.
  • Real estate investors – will typically generate a lot of income at once from the homes they purchase, followed by needing substantial funding quickly.
  • Prime borrowers – are often keen to take advantage of Non-QM loans since they usually have great credit but are looking to take on a loan that may have interest-only payments or who have a higher than normal debt-to-income ratio.
  • Foreign nationals – wanting to buy property in the U.S. may not have a credit score in order to qualify for a traditional loan.  These non-resident borrowers are often helped by their high income, considerable liquid assets, or large down payment.
  • Near or non-prime borrowers – who may not have met the mandatory minimum waiting periods after bankruptcy, foreclosure, short sale to qualify for conforming loans
Alternative Lending and Non-QM mortgage loans are ideal for borrowers who have the desire and means to afford to make payments but are not able to get accessibility to loans until now

Here are some of the Non QM mortgage lending programs offered by Innovative Mortgage Brokers:

  • No waiting period out of foreclosure, short sale, deed in lieu of foreclosure, and bankruptcy
  • High Loan limits
  • Borrowers can qualify with low credit scores
  • High Loan To Value
  • Jumbo Loans With No Mortgage Insurance
  • Higher Debt To Income Ratio DTI
  • Owner-occupied, 2nd homes and investment properties ARE eligible for alternative financing
  • Non-warrantable condos considered
  • Adjustable Rate Mortgages, ARM, or 30-year fixed rate
  • No pre-payment penalty for owner-occupant homes and 2nd homes
  • No credit tradeline requirements
  • SFRs, townhomes, condos, 2-4 units on residential and investment properties
  • Seller concessions allowed
  • Asset-Depletion Mortgage Programs

The Non-QM mortgage loans can be used for a rate-and-term refinance, a cash out refinance, a new purchase for owner-occupied, second homes, and investment properties.

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