We’re sure you’ve heard all the buzz about Non-QM in the past couple of years. It has been hard to avoid and for good reason! However, in case you haven’t, we’ll give you a quick run-down.
A Non-QM loan is a non-qualified mortgage loan. These loans provide deserving non-traditional borrowers the opportunity to qualify for a mortgage. Non-QM loans catch what has fallen outside of the stringent guidelines set by Fannie Mae and Freddie Mac.
Non-traditional borrowers cover a variety of people, occupations, citizenship, etc. Common scenarios that Non-QM lenders see are investors, business owners, and other self-employed individuals that need to qualify using different sources of income. This could include anything from bank statements to a profit and loss from their licensed tax preparer.
The aforementioned self-employed borrowers may also require a non-traditional mortgage due to higher DTIs. If you’re a real estate investor, the portion of debt you take on is higher than a traditional borrower’s. This DTI likely exceeds agency guidelines, turning borrowers to Non-QM which can evaluate the borrower’s ATR on other factors.
Non-QM lenders are supported by private investors. This allows these lenders to look at the whole financial situation of borrowers and make a more holistic lending decision. For example, at Redstone we offer exceptions for credit events, varying loan amounts, property types, and LTVs.
The Non-QM space has experienced increased popularity due to the shift in income sources of employed individuals. Expand your book of business by working with a lender who can increase your breadth of clientele. If you’re looking to join the world of Non-QM, Redstone is the perfect place to start. We offer concierge-level service, a diverse product suite, and cutting-edge technology – to name a few.
Our team is well versed in structuring challenging scenarios so don’t hesitate to reach out to one of our CX Gurus for deals that you are having trouble understanding or placing. Redstone also offers training and product education to ensure that you too are a Non-QM expert. For more information, schedule an appointment to speak with an expert today.