These also may require less formal documentation than other loans. The major advantage of non-QM loans is that they open the door to borrowers who may not otherwise qualify for a mortgage. Allow non-salaried and other unconventional workers to buy or refinance a home.Flexibility of interest-only loan options.
No savings or reserves required (in some cases).Accommodates higher Debt-to-Income ratios for borrowers.Limited income and financial documentation needed.Non-qualified mortgages are best for borrowers who can’t meet the requirements of traditional mortgage loans – such as traditional income qualification or a minimum credit-score. Because of the more flexible qualification requirements, non-QM loans open up real estate investment opportunities to a broader group of individuals.Īpplicants whose incomes vary from month to month, such as freelancers and other types of self-employed borrowers, may qualify for these types of mortgages.
QM VS NON QM VERIFICATION
These regulations were originally issued to ensure borrowers have the ability to repay their loans and to prevent a repeat of the subprime mortgage crisis seen during the Great Recession.Įssentially, a non-QM loan is a type of mortgage loan that allows a borrower to qualify based on alternative methods, instead of the traditional income verification required for most loans.
A non-qualified mortgage (non-QM) doesn’t adhere to the lending standards set out by the Dodd-Frank Act.
0 kommentar(er)
