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* Non-Qualified Mortgage (Non-QM) is any home loan that doesn’t comply with the Consumer Financial Protection Bureau’s existing rules on Qualified Mortgages (QM). Usually this type of correspondent mortgage loan accommodates people who are not able to prove they are capable of making the mortgage payments. Just because it is a Non-QM correspondent mortgage loan does not necessarily mean high risk or subprime mortgage risk. The main difference between the two types of correspondent mortgage loans is that correspondent Non-QM loans for mortgages are protected by the lender against any type of lawsuit should you become unable to afford the mortgage loan. Typically, individuals experiencing one or more of the following may qualify for this alternative:
- High debt ratio
- Blemishes on credit due to unforeseen circumstances
- Self-employed for less than two years or low income on tax returns
NOTE: People who elect to use this type of financing should have an exit strategy in mind. These loans are not designed as keeper loans. Consider these a bridge from your current situation to your destination downline once your credit has recovered so you can either sell or refinance into a better loan.
Best wishes to you!
Branch Manager - Specializing in FHA, VA, USDA, Conventional, Jumbo, Portfolio and Non-QM Loan Products.
