Non-QM loans may have higher fees than a qualified mortgage, they may have interest only or balloon payments, and may allow for a higher debt to income ratio. What is a Non-QM Loan?Ī Non-QM loan is for individuals who cannot meet the basic requirements needed for qualified mortgage. These include bank statement loans, recent bankruptcies, and many other non QM loan types. Update Ap– There are many non-QM mortgage options available again. Today, any mortgage that does not adhere to the requirements for a qualified mortgage is considered to be a Non-QM loan.
This rule created guidelines for lenders which required them to verify the borrower’s ability to repay the mortgage, and to provide mortgage products that reduced risk for both the borrower and lender. In 2014, the CFPB (Consumer Financial Protection Bureau) created the Qualified Mortgage Rule. Today, Non-QM lenders have changed their offerings to provide alternative financing options that are safe. The increase in foreclosures was in part due to a high number of mortgages which helped the borrowers to initially purchase the home, but long term proved to create financial difficulty for those homeowners.
Over a decade ago, many mortgages defaulted because the borrowers could no longer afford the mortgage payments.
AUTHOR: Eric Category: Mortgage Advice Non QM lenders – Non Qualified Mortgages
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