Non-QM loans represent a flexible way that lending institutions offer mortgages to its customers. There exist huge opportunities for lending companies to make significant interest by exploring this market. Nonqualified lending got introduced as an alternative to strict regulations in the loan market that limited the home buyers from acquiring a mortgage loan.
Qualifications and requirements in QM Lending
Non Qualifying mortgage loans represent loans that do not follow the regulations from Consumer Financial Protection Bureau statutes on the qualified loans. Customers who need non-qualifying lending should meet the following conditions:
- Self-employed customers. These customers may not verify their income in the forms which may force them out in the application of the agency loans. The self-employed borrowers may have excellent credit rating but get limited chances in securing the qualified mortgages. Non-qualified mortgages will save their situation.
- A customer or borrow with previous foreclosures. Under the regulation for qualified mortgages, any borrower with past foreclosures should be eligible for new mortgage loans after seven years. Non Qualified mortgage loans provide flexibility to these customers, and they can obtain loans provided that they demonstrate their ability to repay the mortgage.
- Customers that possess low income with the tax returns. The borrowers in this category can get approved to take nonqualified loans if they provide their bank statements for assessment