Many people today have incomes that fluctuate, such as self-employed business owners, hospitality workers, and retirees. This is where non-QM fills the gap, by providing flexible underwriting guidelines for responsible consumers with unique income circumstances. Non QM is also valuable for the consumer who has had a ding on their credit like bankruptcy or past delinquent debt that caused their credit score (FICO) to go down below agency guidelines.
Here are a few key things you need to know:
To qualify for a non QM loan we start by running all applicants through an automated underwriting system to ensure they do not qualify for an agency loan through Fannie Mae, Freddie Mac, or government-insured loans.
Non-QM loans typically have interest rates that are, on average, 1.25% higher than QM loans.
Alternative income verification methods are accepted, such as bank statements and asset depletion.
Recent bankruptcy and foreclosure are OK.
Loan amounts can go as high as $2.5 million.
Loan-to-value can be as high as 90% on purchase loans.
No income/asset investment property purchase at 80% LTV.