What is a Non-QM loan?

Non-QM Loans – Trusted Mortgage Lender

Non-QM loan products s help borrowers with credit issues like foreclosures, bankruptcy, etc.
Get non-qualified mortgage with HomeXpress one of the Fastest Growing Lenders.

 

What is a Non-QM Loan?

 

The Dodd–Frank Wall Street Reform and Consumer Protection Act was signed into law in the summer of 2010 by the President of the United States. Along with other regulatory reforms, this Act created minimum standards for mortgages, including the Ability to Repay (ATR) rules and a Qualified Mortgage definition. The Consumer Financial Protection Bureau (CFPB) put these new rules into effect on January 10, 2014.

In the world of home loans, a qualified mortgage is a home loan that complies with rules established by the Consumer Financial Protection Bureau (CFPB) and standards set by the federal government. Loans sold or insured by national brokers such as Freddie Mac and Fannie Mae are qualified mortgages, but unfortunately these loans are not accessible to everyone due to the strict nature of the requirements in the loan application and review process.

That’s where Non-QM loans (which stands for Non-Qualified Mortgage loan or sometimes Non-Qualifying loans) play a role in helping make the dream of owning a home possible to more people. These are loans that do not meet the federal standards and have different terms which allows Non-QM lenders like HomeXpress Mortgage to accept alternative income documentation to qualify borrowers for their mortgage.

Non-QM loans can help borrowers with financing who have had credit issues in the past such as foreclosures, bankruptcy, late payments or other isolated credit issues. A Non-QM loan also has underwriting guidelines that are different than the typical conventional or government type loans. These guidelines allow the lender to look at the entire loan picture for a borrower and not just their credit score and government underwriting matrices (DU or LP).The Non-QM loans lending guidelines also look at the borrower’s income based on their type of employment and analyze their Ability to Repay (ATR) a loan according to its terms (based on many factors). This includes cash flows through personal and business bank accounts.

Self-employed borrowers typically have more complicated income structures that require different calculations than wage earners. This type of income often times does not qualify under the “one size fits all” conventional/government underwriting standards.

HomeXpress Mortgage provides loans to borrowers that have the ability to repay their Non-QM loans and that meet all regulatory lending criteria. These borrowers can now take part in the American dream of home-ownership even though they may have had a life event that affected their credit or they have verifiable income that needs to be considered outside a standard grid.

Who are Non-Qualifying loans for?

Most often, we see future homeowners in one of the following three situations:

  • Borrowers that are self-employed and have a lot of write-offs on their tax returns
  • Borrowers with recent credit issues
  • Borrowers that wish to purchase Investment properties

Best Non-QM Loans Programs From The Industry’s Fastest Growing Lender

Every person has a story.
Our non-QM loans help more people put the pieces of the home buying puzzle together.

HomeXpress Non-QM Loans – Programs

  • PrimeX – Lowest rates for consumers who nearly qualified for a traditional loan and have not had a foreclosure in the last two years.
  • CoreXFor borrowers that have a FICO score as low as 640 – Cash out can be used for reserves!
  • InvestorX – For investors who can show income via tax returns or pay stubs. Foreign National Programs Available.

Explore our rate sheets and programs for further details about each of our Non-QM and other loan products.

But is a Non-Qualified loan just a “BAD LOAN” in disguise?

No. This is a common misconception. HomeXpress Mortgage has several types of Non-QM Loan products on offer, each with its own set of rates and rules. Just like the process for qualified loans, applicants still go through a full review process to assess their ability to make the Non-QM loan payments successfully in the future. It is a responsible lending process with the flexibility that allows us to accept a different set of documents (allowing for alternatives to pay stubs, which are accepted in qualified loans) during the application process for a Non-QM loan.

This is exactly how HomeXpress Mortgage is able to offer mortgages and make owning a home possible for a wider range of people, including business owners with past blips in their credit history or self-employed professionals who aren’t on a traditional payroll and may have a more sporadic income.