NON-QM LOANS

A non-qualified mortgage — or non-QM — is a home mortgage that is not required to meet standard documentation requirements as usually requested by Agencies that purchase Conforming Loans.

  • Non-QM Programs offer flexible loan eligibility requirements, that include credit scores and debt-to-income (DTI) ratios
  • The processes of reviewing financial documentation and employment verification are less stringent
  • The interest rates are usually higher
  • Fewer lenders offer non-qualified mortgages, hence the selection of Program providers is less abundant than on Conforming loans
  • There is a higher risk that these loans could default due to a less stringent process of income and asset verification
  • Borrowers who are unable to provide sufficient documentation regarding their finances and employment history like individuals that are self-employed or work in fields that do not provide financial paper trail for lending institutions to review and to verify.
  • Borrowers with a delinquent credit history that contains bankruptcies, foreclosures, short sales, low credit scores due to missed payments,…
  • Borrowers with high debt. Lenders typically refuse to give mortgages to anyone with a DTI above 50%. However, some of Non-QM Loans permit for loan approvals without documenting income (No-Ratio Loans) or with presenting bank statements reflecting income deposits instead of presenting tax returns (Bank Statement Loans).

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