Maximize Your Real Estate Investments with Non-QM Loans

In the world of real estate investment, having access to flexible and suitable financing options can be a game-changer. That’s where non-QM (Non-Qualified Mortgage) loans come into play. At Innovative Mortgage Brokers, we understand the unique needs of property investors, and we’re here to guide you through one of the most advantageous loan options available. Whether you’re looking to purchase a new investment property or refinance an existing one in Pennsylvania (PA) or Florida (FL), we’ve got you covered.

What are Non-QM Loans

Non-QM loans are mortgage loans that do not meet the Consumer Financial Protection Bureau’s guidelines for a Qualified Mortgage. This means they offer more flexibility in terms of income verification, debt-to-income ratios, and credit scores. They are specially designed to cater to borrowers with unique circumstances, like real estate investors.

Advantages of Non-QM Loans for Investors

Flexibility in Property Ownership

One of the biggest advantages of non-QM loans for investors is the flexibility they provide in property ownership. With these loans, the deed to the property can be held under an LLC (Limited Liability Company), offering the investor legal protection and tax benefits.

Borrower’s Signature on Mortgage

Even though the deed is under the LLC, the borrower can sign for the mortgage. This means that even though your investment property is under your LLC, you, as an individual, can secure the loan, providing added convenience and flexibility.

Alternative Income Documentation

Non-QM loans allow for alternative documentation for income verification. This can be particularly advantageous for self-employed investors or those with variable income.

Some of the alternative documentation that may be used in non-QM loans include:

• Bank Statements: Non-QM lenders offer specialized programs to qualify self-employed borrowers using bank statements (12 or 24 months).
• Rental Income: Some Non-QM loans allow for the use of rental income as a method of income verification instead of using personal tax returns. Also known as DSCR (Debt Service Coverage Ratio) loans.

DSCR Loans

Debt Service Coverage Ratio (DSCR) loans are a type of financial instrument that lenders use to assess a borrower’s ability to repay a loan. The DSCR ratio is calculated by comparing the cash flow available to a borrower with their current debt obligations. This type of loan is particularly popular among real estate investors, as it allows them to leverage the rental income from their properties to secure financing.

A DSCR loan is not based on the borrower’s personal income but rather the cash flow of an investment property. Therefore, DSCR mortgages can be a viable financing option for borrowers who may not qualify for traditional loans due to their income.

Here’s a simple step-by-step guide on how to calculate the Debt Service Coverage Ratio (DSCR):

1. Identify Your Net Operating Income (NOI): This is the rental income generated by the property.
2. Identify Your Total Debt Service: This is the total amount of your debt obligations for the year, including both principal and interest payments, taxes and insurance.
3. Calculate the DSCR: Divide your NOI by your total debt service.

A DSCR of 1 means that you have just enough income to cover your debt payments. A DSCR above 1 indicates that you have more than enough income to cover your debts, while a DSCR below 1 suggests that you may struggle to meet your debt obligations.

In general, lenders prefer a DSCR of at least 1+, as this provides a cushion in case your income decreases or your expenses increase. However, requirements can vary depending on the lender and the specifics of the loan.

Why Choose Innovative Mortgage Brokers for Non-QM Loans?

Expertise and Experience

At Innovative Mortgage Brokers, we have extensive experience in handling non-QM loans in Pennsylvania (PA) and Florida (FL). Our team understands the intricacies of these loans and can guide you through the process seamlessly.

Competitive Rates

One of the key advantages of choosing us for your Non-QM Loans is our competitive rates. We strive to provide the most favorable terms and pricing available. Our strong relationships with multiple lending partners allow us to negotiate better terms on your behalf.

We understand that the interest rate on your loan can significantly impact your investment returns. That’s why we work tirelessly to secure competitive rates for our clients.

On-time Closing

At Innovative Mortgage Brokers, we understand that time is of the essence when it comes to investments. Delays in loan closure can lead to missed opportunities and potential loss of profits. That’s why we prioritize getting your non-QM loans closed efficiently and swiftly.

Our streamlined process, coupled with our team’s experience and expertise, allows us to move quickly from application to closure. Moreover, we maintain open and frequent communication with our clients throughout the process. This ensures you’re always updated on the progress of your loan and any potential issues are addressed promptly to avoid unnecessary delays.

Customized Solutions

We understand that every investor’s needs are unique. That’s why we offer customized loan solutions that are tailored to your specific circumstances and investment goals.

Dedicated Support

Our team is committed to providing unparalleled support throughout your loan process. We’re here to answer all your questions and ensure a smooth, hassle-free experience.

Conclusion

Whether you’re a seasoned investor looking to expand your portfolio or a newbie taking your first steps in the property market, non-QM loans can be an excellent financing option. At Innovative Mortgage Brokers we can help with both a mortgage for the purchase of an investment property, or a refinance of an existing loan in Pennsylvania (PA) or Florida (FL). And with us by your side, you can navigate the process with ease and confidence