What are non-QM loans
Non-Qualified loans otherwise referred to as Non-QM loans are currently proving to be the best alternative financial reprieve for many prospective borrowers. Non-QM loan’s popularity stems from the fact that they bypass the existing Consumer Financial Protection Bureau (CFPB) rules and regulations. CFPB rules and regulations are set to prohibit or limit products and features that appear to be high risk by creating a safe loan environment.
Prospective borrowers looking for an easy way out, especially past the stringent rules and regulations set by the CFPB confidently opt for the more convenient and easily accessible Non-QM loans. As there are various types of Non-QM loans available, it is wise for the borrower to have the prior knowledge and necessary information to know what they are signing up for during the loan application.
Why take a Non-QM loan?
Non-QM loans confer numerous benefits to the borrower, primarily because they do not operate within the confines of the regulations and laws set by CFPB. With limited options, Non-QM loans are always the go-to financial assistance to borrowers in need of urgent financial back-up. Below are the reasons why prospective borrowers should say yes to Non-QM loans:
- Minimal paperwork required – The lender does not need extensive paperwork to gain trust and confidence in the borrower’s loan repayment ability. Compared to the other forms of loans, Non-QM loans require minimal paperwork for the loan to be approved
- Repayment terms – Non-QM loans have extensive repayments periods, some extending up to 40 years, convenient enough for the borrower to arrange for favorable repayment rates
- Easy and faster verification process – The borrower’s income verification is accessed through bank statements, and not necessarily through the cumbersome paystubs and tax forms. Confirmation from the bank statements makes the process easier and faster, both to the lender and borrower
- Favorable repayment terms – The borrower can use fixed assets to qualify for the applied loan in case the money or income falls short.
- The borrower does not need to wait for the mandatory set waiting period in cases of bankruptcy or facing imminent closure before applying for and getting the loan.
- Reduced waiting period – Compared to the other available loan options, the Non-QM loans are easy to apply for, process and are granted in a short time, convenient enough when the borrower needs urgent finances.
For prospective borrowers requiring an alternative loan with suitable terms and which bypasses all the statutory CFBP regulations and laws, then the Non-QM loans will be the preferred option for them. The loans offer an incredible 43% DTI, enabling home proprietors the ability to easily get the requisite finances to get a mortgage and own a home.
For those marred with the financial red=tape including the stringent restrictions provided for by the statutory regulatory bodies, the best way out to stay financially afloat is considering taking up a Non-QM loan. The Non-QM loans will be granted faster, requiring little paperwork irrespective of whether one is facing possible closure or bankruptcy.