Loan Programs Mortgage Brokers Non-QM Tips

Why Originate Non-QM?

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.

Non-QM Tips Technology

The Future of Lending is Technology

Mortgage Brokers – What are some of your biggest frustrations when it comes to your day-to-day processes? Do you find yourself spending an excessive amount of time on your bank statement files? We understand how collecting bank statements and hand-calculating income can be unnecessarily strenuous.  

With the steady increase in the popularity of bank statement loans, we knew that these pain points had to be addressed sooner rather than later. Since Redstone’s inception in 2021, our pipeline has been filled with over 2,000 bank statement loans. Borrowers continuously turn to this type of documentation as their income is primarily reflected here. So we thought, how can we provide these borrowers with the same, smooth process as our other borrowers?

At Redstone, we decided to use our technology background to create an everyday solution. We released Redstone Verification to eliminate inefficiencies and human error by creating a tool that is secure, intuitive, and accelerates the process of income calculation.

This tool tremendously reduces the amount of back and forth communication that often results in unsecured documentation being shared. Whether this report is used to qualify borrowers upfront or to verify income during the loan process, Redstone Verification will provide stakeholders with a thorough income analysis.

Here’s a step-by-step outline of the process from start to finish (notice, only 6 steps). 

  1. Borrowers will securely connect to their financial institution through an encrypted link 
  2. They will choose the account that they would like to use to showcase their income stream
  3. Then click “submit” and wait for the report to be delivered straight to their email inbox, this should take approximately 5 minutes
  4. Review the report that includes a summary of the account, total assets, large deposits, NSFs, and more
  5. If done during the loan process, this report will also be uploaded to Redstone’s system so that our credit team can review the same information
  6. The report from Redstone Verification is applicable for sixty days after it is sent

At Redstone, streamlining the Non-QM loan process is not just an option, it is a priority. Through automated technologies, income information is available within minutes, foregoing the hassle of borrowers searching for documentation and brokers manually verifying it. For more information on Redstone Verification, visit our website, or speak with an expert today.

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