What is a Non-QM mortgage? A Non Qualified Mortgage simply means that it does not fit Fannie, Freddie, FHA, VA or USDA’s guidelines. It does not mean “Subprime” or “High Risk”.
These loans are generally only kept for a short term (1-5 years) and used to purchase or refinance a property when that person does not qualify for any standard mortgage options.
Here’s an example: A borrower has been through a hardship like the loss of their job and this caused them to go through a foreclosure or short sale. Maybe they had to file bankruptcy to keep their head above water. In the past qualifying for a mortgage was not an option until you had met certain mandatory waiting periods. Anywhere from 1-8 years. With a Non-QM Loan it’s possible to bypass those waiting periods and purchase or refinance right away.
Here’s another example: A family wishes to purchase a home. Their income is derived from their own business. Many businesses write off all or some of their business expenses which decreases the amount of income that they show as a profit. This will exclude them from traditional financing because they cannot prove enough income to qualify. With a Non-QM loan there are other ways to qualify like using business or personal bank statements to prove their income.
I have extensive experience with this type of financing. Call, email or text me and I will walk you through the qualification process or click here to apply now!
Mortgage Loan Officer | Edge Home Finance