Non-QM Mortgage Loans & Alternative Lending
A non-QM (Non-Qualified Mortgage) lender is a financial institution that offers mortgages that do not strictly abide by the criteria set by the qualified mortgage regulations. A qualified mortgage follows strict underwriting guidelines and lender requirements to ensure that the borrower has the ability to repay the loan. Non-QM mortgages are designed for borrowers who do not meet the strict criteria set forth in QM regulations, allowing lenders to lend to borrowers with unique or complex financial situations.
These types of loans generally carry higher interest rates compared to QM loans due to the higher risk associated with them. Non-QM loans come in various types including stated income, bank statement, asset-based, interest-only or balloon-payment mortgages. Non-QM mortgages can be a good option for self-employed borrowers, or those with unique financial situations, who do not have sufficient documentation to prove their income.
It is important to understand the risks associated with non-QM mortgages before applying, as they may not be suitable for everyone. It is recommended to thoroughly research the lender’s reputation and mortgage terms before applying for a non-QM loan.
As a mortgage broker, we work with multiple lenders who offer Non-QM mortgages, ensuring we can provide a range of options to choose from depending on your financial needs and objectives.
Who Benefits From These Loans
- Self-employed borrowers – are often paid sporadically and have more than one stream of income, which makes it difficult for them to obtain a qualified mortgage. These individuals typically turn to loans based on their bank statements as opposed to their W2s.
- Real estate investors – will typically generate a lot of income at once from the homes they purchase, followed by needing substantial funding quickly.
- Prime borrowers – are often keen to take advantage of Non-QM loans since they usually have great credit but are looking to take on a loan that may have interest-only payments or who have a higher than normal debt-to-income ratio.
- Foreign nationals – wanting to buy property in the U.S. may not have a credit score in order to qualify for a traditional loan. These non-resident borrowers are often helped by their high income, considerable liquid assets, or large down payment.
- Near or non-prime borrowers – who may not have met the mandatory minimum waiting periods after bankruptcy, foreclosure, short sale to qualify for conforming loans
Why Consider Non-QM Loans
Non-QM loans provide the flexibility and adaptability you need when traditional lending options aren’t an option. These programs allow lenders to assess your financial health in ways that make sense for your unique circumstances, helping you achieve your homeownership or investment goals.
Here are some of the Non QM mortgage lending programs offered by Innovative Mortgage Brokers:
Bank Statement Loans
For self-employed borrowers with strong cash flow but low reported taxable income, bank statement loans are an excellent option. Instead of relying on tax returns, these loans use personal or business bank statements to verify income.
- Ideal for self-employed individuals
- Income verified through 12 or 24 months of bank statements
- No tax returns required
Asset Utilization/Depletion Loans
If you have significant assets like savings, investments, or retirement accounts, this program allows you to use those assets as a basis for income qualification. Asset utilization loans are particularly beneficial for retirees or high-net-worth individuals.
- Leverage your liquid assets
- No employment or traditional income verification required
- Great for asset-rich borrowers with low taxable income
Profit and Loss (P&L) Loans
P&L loans are designed specifically for self-employed borrowers who want to qualify based on their business’s financial health. Instead of using tax returns, these loans rely on a professionally prepared Profit and Loss statement, offering a clear picture of your income and expenses.
- No tax returns required
- P&L must be prepared by a CPA, accountant, tax preparer, or enrolled agent
- Flexible option for borrowers with fluctuating or complex income
- Primarily for primary residences
DSCR Loans (Debt Service Coverage Ratio)
DSCR loans are tailored for real estate investors. These loans focus on the property’s cash flow rather than your personal income, making it easier to qualify for financing if you’re building or expanding your investment portfolio.
- No personal income documentation required
- Loan eligibility based on the rental property’s cash flow
- Simplified approval process for investors
Other Benefits
- No waiting period out of foreclosure, short sale, deed in lieu of foreclosure, and bankruptcy
- High Loan limits
- Borrowers can qualify with low credit scores
- High Loan To Value
- Jumbo Loans With No Mortgage Insurance
- Higher Debt To Income Ratio DTI
- Owner-occupied, 2nd homes and investment properties ARE eligible for alternative financing
- Non-warrantable condos considered
- Adjustable Rate Mortgages, ARM, or 30-year fixed rate
- No pre-payment penalty for owner-occupant homes and 2nd homes
- No credit tradeline requirements
- SFRs, townhomes, condos, 2-4 units on residential and investment properties
- Seller concessions allowed
Our Services
At Innovative Mortgage Brokers our team has years of experience in working with non-QM buyers and helping them find the right lender and loan product to suit their needs. We believe in our customers and work diligently to advocate for them by offering customized mortgage solutions through a no-obligation consultation process.
Our services include:
- Personalized advice on which Non-QM mortgage types are right for you
- Competitive pricing options for all Non-QM loan products
- Access to a dedicated team of mortgage experts to guide you through the Non-QM mortgage process
- Support and guidance throughout the loan process
Why Choose Us?
We understand that not all borrowers have the same requirements and thus approach each borrower’s situation differently by providing custom solutions to suit their individual situation. We are dedicated to providing an exceptional experience with a focus on transparency, honesty, and integrity, allowing you to make confident and informed decisions.
With our Non-QM mortgage experts and access to multiple lenders, we aim to provide you with hassle-free and efficient mortgage solutions, allowing you to secure the dream house you want without the constraints of traditional mortgages.
We believe that everyone deserves a chance to achieve their dream of homeownership. If you are looking for a mortgage in Pennsylvania (PA) or Florida (FL), contact us today to learn more about our expert and personalized mortgage services.
The Non-QM mortgage loans can be used for a rate-and-term refinance, a cash out refinance, a new purchase for owner-occupied, second homes, and investment properties.
