Non-QM (Qualified Mortgage)

Non-QM (Qualified Mortgage) loans are mortgages that do not meet the standards set by the Consumer Financial Protection Bureau (CFPB) for qualified mortgages. These loans are often considered riskier for both the borrower and the lender. The CFPB introduced the concept of Qualified Mortgages as a way to ensure that lenders issue mortgages to borrowers who are reasonably able to repay the loans.

Non-QM loans are typically designed for borrowers who may not meet the stringent requirements of traditional QM loans, such as those who are self-employed, have non-traditional sources of income, or have a high debt-to-income ratio. They can also be for properties that do not meet the criteria for conventional loans. Some common types of non-QM loans include:
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While non-QM loans provide more flexibility for certain borrowers, they generally come with higher interest rates and may require a larger down payment. Lenders offering non-QM loans often rely on a more thorough analysis of the borrower's financial situation and collateral to minimize the risk of default.

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Frequently Asked Questions

Mortgages are typically offered by financial institutions, such as banks and credit unions. Mortgages can also be obtained from other sources, including private lenders and government agencies.Mortgage rates vary depending on the borrower’s credit history, income level, loan-to-value ratio, type of property being purchased and other factors.

When should I refinance?

There are a lot of reasons to get a new loan. We only look at the cost of getting a lower interest rate. We don't look at how much you'll save on your payments, which can change the results because you're frequently borrowing less money. Then, we figure out how long it might take to get those costs back. In many cases, you, the borrower, won't have to pay any or very little of the costs. Even a slight change in rate can save you money. We also look at the remaining time on your mortgage. How much money you could save, and what you plan to do with the money you save from lower rates.

What are the points?

The no points, or based on paying 1 point, are references to a percentage of the total amount that can be borrowed. Since one point is equal to one percent of the loan, 1 point on a $100,000 loan would amount to $1,000. 1 point on a loan of 1.5% would be equal to $1,500.

Should I pay points to lower my interest rate?

Paying discount points to cut loan rates can be effective. Even if you anticipate staying in the property for a long time, the points may not be worth paying unless they provide a cost-effective return depending on the duration it takes to recover the costs. Points can often cut payments or increase borrower power.

What is an APR?

The annual percentage rate (APR) is the annual interest rate on a loan or investment.

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