Non Qualified Loan in Laguna Niguel, CA

    Great for borrowers that have limited income documentation, unreliable income streams, a Debt to Income Ratio greater than 43% or those that want an interest only loan.
  • Interest rates on loans will vary from lender to lender, but you may find that a nonqualified mortgage will have a higher interest rate.
  • For some borrowers with unreliable income streams or a high DTI, a nonQM loan can help them get the money they need.
One of the fastest-growing ideas today is that of the entrepreneur and this is followed by freelancers from almost every industry. When you are looking to buy a property, it is one thing to not meet the requirements and a completely different story when the requirements don’t include you altogether. Most freelancers will be able to attest how they were unable to get a loan approval because their income does not match the traditional requirements of banks and lenders. However, there is hope yet, contact Salem Aljawad at Lifetime Home Finance to learn about Non-Qualified Loans. These are special loan programs that fit those who don’t meet nor match the traditional requirement of loan programs.

What is a Non-Qualified loan?

A Non-Qualified loan or Non-QM loan is a loan program designed to help people who are unable to provide conventional documentation for a loan.

All mortgages and loans share certain requirements as far as documentation goes. You will be required to provide proof of income, proof of residence, tax documentation, etc. But if a person is unable to provide this documentation for a genuine reason or simply doesn’t have such documentation, they will not be qualified for most loans altogether.

This is where Non-QM loans become very important. They help people who are unable to provide conventional documents, qualify for home loans by means of accepting alternative documentation for processing the loans. Non-QM loans are also very suited for people who experience instances of late payments or credit problems as isolated financial issues.

How do Non-Qualified work?

Non Qualified LoanWorking with Non-Qualified loans requires lenders to take a broader picture in focus to the circumstances of the borrower. These loans have different guidelines that cater to a variety of situations that the borrower might be facing. For example, traditional mortgages rely on credit scores and debt to income ratios when gauging the ability of someone to repay the loan, with Non-QM loans, however, use a different calculation. They use “Ability to Repay” or ATR to make the same assessment.

What are the benefits of Non-Qualified loans?

The benefits of Non-Qualified loans are:

- Non-QM loans have flexibility for underwriting
- They accept lower credit scores compared to conventional loans
- Documentation requirement depends on the unique case
- Different types of residential properties can be qualified
- Interest rates are available in fixed and variable
- Loan limits are higher in Non-QM loans
- Down payments are lower than conventional loans
- Rent from properties can be qualified as a form of income
- Private Mortgage Insurance (PMI) is not required
- Closing in Non-QM loans is faster than traditional loans
- Equity in Non-QM loans is higher

What is the eligibility for Non-Qualified loans?

When it comes to requirements of loan approval, Non-QM loans are the most flexible. Since they cater to people of varying situations and backgrounds, the requirements are not fixed. They do still require the same type of information as other loans however, the documentation provided for these loans for approval purposes, is dependent on what documents a borrower can present to meet those requirements. Loan officers helping people qualify for these loans need to have a very broad understanding of the documentation to best judge how they can help the borrower meet the approval requirements.