Non-QM Mortgage Loans
What is a Non-QM Loan?
A Non-QM loan is a loan that does not meet the standards set by the Ability to Repay/Qualified Mortgage (ATR/QM) rule as defined by the Consumer Financial Protection Bureau (CFPB).
A Non-QM loan may be the best option for you depending on your unique circumstances.
What is a Qualified Mortgage?
A loan must meet several standards to be considered a qualified mortgage under the ATR/QM rule. First, it must avoid risky loan features, such as negative amortization, a term longer than 30 years, a balloon or interest-only payments, or fees that typically exceed 3% of the full loan amount. In general, avoiding these terms or features is thought to make a loan safer and more stable for borrowers.
Is a Non-QM Mortgage Right for You?
Non-QM loans aren't right for everyone, but sometimes they are the best fit to help you achieve your financing goals. These loans can be misunderstood- while they may ignore some of the traditional underwriting requirements they still require a lot of documentation. Most options allow for higher Debt-to-Income (DTI) ratios and/or alternative income documentation.
Types of Non-QM Loans
- Bank Statement Loans
- Investor Cash Flow (DSCR)
- 40-Year Fixed Options
- Interest Only Options