As market supply shrinks and rates become more favorable, many mortgage brokers are starting to feel the pinch. It’s a competitive market. Some brokers are finding they’ve got fewer potential deals in their pipeline. A great way to attract more borrowers is by offering Non-QM business purpose loan options. If you haven’t yet funded a loan for your borrowers using Non-QM loan programs, now is the perfect time to start. Consider the following ways to reach more borrowers:
Obtaining a loan for an investment property traditionally requires a decision. An investor can finance their property with a conventional government-backed loan using income, credit, and assets to qualify or they can qualify on the future rents they anticipate collecting. When their choice is to qualify using future rents, borrowers turn to an asset-based mortgage lender for a Non-QM business purpose loan.
A Non-QM mortgage lender will use the investor’s Debt Service Coverage Ratio (DSCR) to qualify a borrower. Debt to income generated is analyzed to arrive at a ratio. The ratio is at 1.0 when the property generates enough money to cover its debts. With ranges from .75% to 75%, leading Non-QM lender HomeXpress Mortgage is positioned to help brokers attract more borrowers.
Many brokers are only used to dealing with foreign nationals within very rigid guidelines. This is because they can pose a quandary for some lending institutions. A government matrix can’t look far beyond a lack of a social security number, foreign bank accounts, and foreign employment. The combination can pose too risky for some lenders. However, these are often great investors that would fit neatly into a Non-QM business purpose loan. Offering a Non-QM business purpose loan option means willing brokers are better able to work with this growing population. Foreign nationals account for a significant portion of real estate investors, expanding a potential pipeline beyond one locality. Suddenly, borrowers could be located half a world away. What an opportunity for you to expand your business with Non-QM options.
Today’s investors are increasingly supplementing rental income on properties using Airbnb and VRBO. These short-term rentals have not always been easy for lenders to evaluate. Regional and seasonal factors often influence consumers’ rental behaviors, making it tougher to determine what future rental income will be. Under a Non-QM business purpose loan, investors can qualify their properties easier and show their ability to repay the loan. Lenders such as HomeXpress Mortgage use two ratings to qualify- a housing history on the subject property and the borrower’s primary residence. This kind of flexibility is an advantage for brokers who want to add more borrowers to their pipeline.
As competition grows in the mortgage industry, more brokers are starting to examine their options. For some, this means investigating the merits of Non-QM loans further. If you have questions and would like to talk to a skilled and knowledgeable Account Executive, give our team a call at (855) 598-1430 or submit a loan scenario today.