NON-QM Loan Requirements For Purchase and Refinance
In this article, we will cover and discuss non-QM loan requirements for purchase and refinance transactions. Despite the coronavirus pandemic that broke out in February 2020, the housing market has been going strong. Again, 2022 was a historic year for the housing and mortgage markets.
Home prices continue to rise despite the coronavirus economic impact due to the high demand. There is more demand for homes versus inventory. Non-QM lenders have loosened non-QM loan requirements on most of their non-QM and alternative mortgage programs.
What Are The Mortgage Rates on Non-QM Loans?
Mortgage rates on non-QM loans are generally higher than on conforming and traditional loans. However, non-QM mortgage rates are not close to hard money loans. Home sellers are raking it in with double-digit appreciation. Home values have skyrocketed double digits in the past seven years.
The Federal Reserve Board has lowered interest rates to zero percent, marking it the first time rates were at 0% percent in the history of the United States. Zero interest rates by the Central Bank sent mortgage rates plunging to historic lows. Then, the Feds did a total of 180 and started increasing rates to fight inflation. Mortgage rates have skyrocketed from a low of 2.75% in early 2021 to 6.5% today. Despite the high rates, home prices remain stable and homes are still in demand.
Non-QM Loan Requirements on Down Payment
Many homebuyers who planned on buying a home in a few years could not resist the temptation of historically low rates so they pulled the trigger on buying today. 2021 is expected to be another stellar year for the housing market.
Mortgage rates are expected to remain at historic lows into 2021 and well into 2022. Non-QM Mortgage Brokers has never been busier due to its no-lender overlays on government and conventional loans as well as its lenient non-QM loan requirements.
Housing Market Forecast
There have already been some exciting announcements in the mortgage industry. We expect 2021 to be busy especially when it comes to NON-QM loan requirements on most non-QM and non-prime loan programs.
Since all of the major lending agencies such as FREDDIE MAC, FANNIE MAE, USDA, FHA, and VA are currently overseen by the federal government, guideline requirements have become strict.
What Is Considered a Non-QM Loan?
This can affect your ability to qualify for a mortgage. If you have had trouble in the past with derogatory credit issues such as a foreclosure, you may want to look into a NON-QM mortgage loan.
In this blog, we will detail what a NON-QM mortgage loan means, some of the new loan products for 2021, and how to apply for a NON-QM mortgage with Non-QM Mortgage Brokers In this article, we will cover and discuss the 2022 NON-QM Loan Requirements for Purchase And Refinance Transactions.
Qualified Mortgage Versus NON-QM Loan Requirements
A NON-QM mortgage loan stands for a non-qualified mortgage. A QM MORTGAGE is overseen by the major agencies. For example, FHA, conventional, USDA, and VA mortgages are considered qualified mortgages.
These have very cut-and-dry mortgage guidelines that must be met. Some of these mortgage guidelines have 7-year time requirements before being able to apply for a qualified mortgage.
Is A Non-QM Loan a Conventional Loan?
A conventional loan needs to conform to Fannie Mae and Freddie Mac guidelines. Non-QM loans do not conform to Fannie or Freddie Mac guidelines. Non-QM loans are portfolio loans.
Now that you understand what a qualified mortgage is, a NON-QM mortgage is simply outside of that realm. Yes, a NON-QM mortgage does have its own set of non-QM loan requirements and guidelines depending on the non-QM wholesale mortgage lender. Non-QM loan requirements are much more lenient than traditional mortgages.
Non-QM Loans For Bad Credit
Especially when it comes to derogatory credit events such as a foreclosure, deed-in-lieu, or short sale. You can be one day out of foreclosure and still qualify for a NON-QM mortgage. NON-QM mortgage loans are nothing new, they’ve been around for years.
Thousands of Americans have already utilized them to purchase or refinance their properties. Non-QM loans are a great option for homebuyers who cannot qualify for traditional mortgages. This is a great tool to build equity with a home purchase and not make a landlord rich.
UPDATED Non-QM Loan Loan Requirements on New Products
New NON-QM loan products for 2022. 85% LTV cash-out refinances; In 2019, both FHA and VA lowered their maximum loan-to-value (LTV) requirements for cash-out refinance mortgage loans.
Now only a veteran can use a qualified mortgage to get more than 80% loan-to-value out of their property during a cash-out refinance. So, if you are not a veteran, even with an FHA loan, you are limited to 80% loan-to-value.
Cash-Out Non-QM Loan Requirements
That’s where this NON-QM mortgage loan can really help. NON-QM still allows 85% loan-to-value cash-out refinance mortgage transactions.
This extra 5% can help you pay off debt, help pay for your kids’ college, complete home repairs, and even fund investment opportunities. While the loan-to-value requirements are put in place to protect your house from equity stripping, these refinance transactions can put thousands of Americans in a better overall financial situation.
Talk To A Loan Officer
Unique and Alternative Non-QM Mortgages
Platinum NON-QM products. In the last few months of 2021, a few of our NON-QM investors have started introducing PLATINUM NON-QM mortgage products.
The rates aim to be closer to conventional mortgage rates for high credit score borrowers who may not qualify for a conventional mortgage. Besides competitive interest rates, these loans allow a large number of Americans to enter mortgage financing where they may not be able to with Fannie Mae or Freddie Mac guidelines.
- Up to 90% LTV with a 680 Credit Score
- Max Cash out of up to $1 Million
- 12 or 24 Months Bank Statements can be used for income
- 1-year documentation program available (W2 or tax return)
- ARM, FIXED, or Interest Only Options available
- Cash-out funds can be used for reserves
Credit/Life event seasoning 4 yrs:
- short sale, foreclosure, deed-in-lieu, loan modification, and 120-day mortgage late payments
- Jumbo loan amounts up to $ 2.5 M
- DTI Up to 50%
Non-QM Mortgage Brokers offers non-QM mortgages one day out of bankruptcy and foreclosure.
No Income Tax Returns Non-QM Loan Requirements
We still have all of our other than NON-QM mortgage products available.
- Everything from bank statement loans, one-year tax return loans, investment property loans, Fix and Flip mortgages, and more
- We have a Full Slate of NON-QM loan products that most lenders do not offer
- If you are having trouble qualifying for a mortgage, please give us a call
We would love to help you with your NON-QM mortgage needs.
Pre-Payment Penalty on Non-QM Loans
A frequently asked question about NON-QM mortgage loans; Is there a prepayment penalty? If the NON-QM mortgage loan is on a primary residence, there is no prepayment penalty.
Depending on the loan product, there can be prepayment penalties for investment properties or second homes for a NON-QM mortgage. Usually no longer than two to three years. This is an important question to ask.
Using Non-QM Loans As a Bridge Loan
Many borrowers are only in a NON-QM mortgage loan for six months to a year. Non-QM Mortgage Brokers completes numerous NON-QM mortgage loans and helps refinance our clients as soon as possible. Please call Mike Gracz at 630-659-7644 to discuss refinance options down the road.
Non-QM Mortgage Brokers are specialists in NON-QM mortgage lending. We are also specialists in FHA, VA, and conventional mortgage lending. 75% of our clients have either been denied by their current lender or not gotten the customer service they expect. If you have any mortgage questions, please contact Mike Gracz at 630-659-7644.
