Your Complete Guide to the NON-QM   Home Loan 

1. SECTION 1What is a NON-QM   Loan?
2. SECTION 2Am I Eligible for a NON-QM   Loan?
3. SECTION 3NON-QM   Loan Benefits
4. SECTION 4NON-QM   Loan Rates
5. SECTION 5First-Time Homebuyers
6. SECTION 6NON-QM   NON-QM  Loans
7. SECTION 7Refinancing with a NON-QM   Loan
8. SECTION 8Contract Guidelines
9. SECTION 9The NON-QM   Loan Process

NEXT STEPStart Your Quote Online →

What is a NON-QM Loan?

 Video: The NON-QM Loan Process

A NON-QM home loan like a jumbo loan is one that is through private investors like insurance companies, big banks, and private funds. The risk tolerance for these investors is higher because the interest rates are higher so thier return in higher. NON-QM loans have been streamlined through the years to provide access to the mortgage market for all types of buyers; first time home buyers, first time move up buyers, and investors. A jumbo home loan is a large sum of money lent to a borrower by a mortgage lender. Jumbo home loans often have higher lending requirements and qualifications but in return you are able to purchase in the luxury market price ranges. 

When a prospective homeowner is ready to shop around for a mortgage, they will work with their Orbit Home Loan mortgage broker. This is a financial professional who brings together borrowers and lenders. They are not lenders and, as such, do not use their own funds to advance mortgage loans. Instead, they act as intermediaries, helping consumers comparison shop, bringing them a variety of quotes from different lenders at one time.

 

If you're ready to start your NON-QM loan, check your eligibility or have specific questions on the NON-QM   loan, talk with Orbit Home Loans specialist today.

Start Your Quote Online →

Loan Chart

Exploring the NON-QM  Loan

How Do Conventional Loans Work?

Non-QM home loans work like this:  Your Orbit Home Loan mortgage broker (Mortgage Banker) works on your behalf to qualify you with the most competitive lenders in the nation. Non-QM home loans are typically lent out with 15- or 30-year repayment periods; the one that’s right for you depends on your personal finances, your income, and the interest rate you can secure. Once you are qualified, completed the process and have purchased the property your lender will sell your loan to a private investor fund. That investment group will either service your loan or they will have your loan serviced by a servicing company.  It is important to remember that you payments includes your promise to pay back the lender with interest. 

Interest is the percentage rate you pay to the investors for the trouble of lending you money. This is how the they makes money from having lent you such a large sum. Interest rates are either fixed or adjustable and interest rates normally adjust daily but can adjust multiple times a day. The interest rate you receive on a conventional loan will also vary based on your own personal financial profile.

What Is a Non-QM Loan?

A Non-QM loan, or a non-qualified mortgage, is a type of mortgage loan that allows you to qualify based on alternative methods, instead of the traditional income verification required for most loans. Common examples include bank statements or using your assets as income. Because of the more flexible qualification requirements, Non-QM loans open up real estate investment opportunities to a broader group of individuals.

Types of Non-QM Loans

1. Bank Statement Loan

Only a bank statement is required for this type of Non-QM loan. Borrowers can qualify with as little as two month’s bank statements however our most popular program is our 12-month bank statement loan. This loan is often a good solution for self-employed borrowers, business owners, realtors, consultants, and entrepreneurs.

2. Jumbo Loans with 10% Down

While traditional jumbo loans still often require 20% down, we offer near-miss jumbo loans up to $3 million with as little as 10% down, up to a 55% debt-to-income ratio, and credit scores as low as 660. Jumbo loans with 10% down are often the ideal solution for first-time buyers who might still have large student loans and other types of “good credit debt”. 10% down jumbo loans are also good for high-income earners who are looking to invest their cash in other assets.

3. No Income Investment Loans

Private and hard money loans often have high rates and take a while to get approved for, which is not ideal for most real estate investors. Alternatively, both new and experienced real estate investors can benefit from the expanded criteria offered by no-income investment loans which allow you to build your real estate portfolio with fewer setbacks. The Debt-Service-Coverage-Ratio loan uses the rental income of the property to qualify and does not take into account your personal income.

4. Asset-Based Loans

Asset-based loans allow you to leverage assets you already have, including checking and savings accounts, investment accounts, or money market accounts, to secure a loan. This type of Non-QM mortgage is ideal for individuals with substantial liquid assets available. Although asset-based loans are typically associated with high-interest rates, we have access to wholesale rates and favorable borrowing terms. Griffin Funding does not require you to pledge your assets.

5. Foreign National Loans (ITIN)

If you do not have a valid Social Security number, U.S. FICO score, or Individual Tax Identification Number (ITIN) you can still qualify for this type of Non-QM loan. To qualify, you will need to provide a VISA or VISA waiver as well as three active and open trade lines with a two-year history.

6. Interest-Only Home Loans

We offer interest-only home loans on 40-year fixed loans, 30-year fixed loans, 7/1 arms, and 5/1 arms. During the first 10 years of the loan, you will only pay the interest. This provides significant savings over the life of the loan. However, it’s important to keep in mind that you will not be paying down the principal balance during the interest-only period.

7. Recent Credit Event Loans

Recent credit events can make it challenging to secure a loan because many lenders view them as a red flag. However, we offer loan programs for borrowers with recent credit events including foreclosure, short sale, and bankruptcy. While we do offer options for as little as one day out from the credit event, loan terms typically improve the longer it has been, even in just a year or two.

8. Commercial Rental Property Loans

We offer a variety of loans specifically tailored to the needs of real estate investors who want to expand their portfolio to include single-family homes, 2 to 4 unit properties, condos, townhomes, multi-use, and multi-family 5 to 20 unit properties. Our loans are designed to make the process easier for buy-and-hold investors.

NON-QM Cash-Out Refinance (PAUL)

 

Check Your Eligibility Today (CLICK)

 

What are NON-QM Loan Limits? 
The Non-QM loan limit is designated by county. Most counties are assigned the baseline conforming loan limit. However, there can be variations on the conforming loan limit based on regional economic differences.

What is the NON-QM funding fee? 

Although there may be some fees associated with these loans there are no funding fees for Non-QM loans.

Is the NON-QM   loan a good option?
We want what is best for you so to be honest this is not the best option when it comes to loans but every individual has their own needs and this loan is perfect for those that need some flexibility and maybe not the best credit score or fluctuating work. 

Non-QM loans are favorable to borrowers for many reasons, including: 

• Greater underwriting flexibility
• No personal income calculations are required
• No job history is required (in some cases)
• As little as 10% down required
• No reserves required (in some cases)
• Credit scores as low as 620 allowed (580 w/ compensating factors)
• Low debt-service-coverage ratio (DSCR) on investment properties
• Counting rental income (including Airbnb & VRBO)
  
  

How do I get a NON-QM  loan?

Talk with a trusted lender that knows NON-QM   loans and how to get the most from this hard-earned benefit. The process typically starts with getting preapproved, which can often be done in minutes using your phone, laptop or tablet. 

Loan preapproval l is a key first step before making an offer on your dream home. Having that preapproval l letter gives you a clear sense of your buying power and shows sellers and listing agents you have what it takes to get to closing. 

Start my NON-QM  loan with Orbit Home Loans -- the Nation's #1 NON-QM   purchase lender

If I’ve previously used a NON-QM   loan, can I use it again?

Yes, this is not a one-time option. Once you earn the NON-QM loan benefit, it's yours for life. You can reuse the NON-QM loan over and over again, and it's even possible to have more than one active NON-QM   loan at the same time.

Continue to learn more about NON-QM  loan eligibility in our next section.