Non-QM Mortgage Products:

Alternative Method For Mortgage Loans

Mortgage Dove provides non-QM mortgage products that enable borrowers to qualify based on better representations of their reliability. Your credit history, bank statements, or rental income can represent your financial situation. Many Non-QM mortgage products are available to help you finance your purchase, whether you're a new or experienced real estate investor or a first-time homebuyer.

Non-QM Mortgage Products

For an alternative method for mortgage loans, here are some options to explore:

Bank Statement Loans

A bank statement must only support this type of Non-QM loan. Self-employed borrowers can qualify for a loan when they submit their bank statements for the past twelve months.

Asset-Based Loans

With asset-based loans, you can leverage assets you already have, such as checking and savings accounts, investment accounts, or money market accounts, to qualify for a loan.

DSCR Loans

Debt Service Coverage Ratio Loans, or DSCR Loans, allow borrowers to qualify for financing based on the cash flow generated by their rental or investment property.

Non-QM Loans As An Alternative Method For Mortgage Loans

Non-QM loans, or non-qualified mortgages, allow you to qualify based on an alternative method for mortgage loans instead of the traditional income verification required for most loans. Non-QM loans offer more opportunities for real estate investment because the eligibility requirements are more flexible. For example, bank statements or assets are commonly used as sources of income.

Difference between Non-QM and Qualified Mortgage

A non-QM loan is an alternative method for mortgage loans. Non-QM loans do not need to comply with the guidelines for qualified mortgages outlined by the Consumer Financial Protection Bureau (CFPB) and the federal government.

Requirements for Qualified Mortgages

In an effort to make borrowing requirements more stable, the CFPB has established a set of rules for QM loans. This is to prevent borrowers from entering into loan agreements that they cannot pay back in the future. During the Great Recession of 2007-2009, many subprime borrowers defaulted on their mortgages. They were forced to file for foreclosure, prompting stricter regulations in 2014. The situation had long-term effects that negatively impacted the economy and many individuals' credit scores.

QM Requirements Updated Highlights

A few of the essential takeaways from the updates made to the QM requirements are as follows:

  • Loan terms of no longer than 30 years
  • Fees and points of less than 3% of the loan amount
  • Negative amortization, interest-only, or balloon loans are not allowed

Mortgage qualification has become more difficult because of these restrictive requirements. The house of your dreams or investment opportunity may be out of reach if you don't prove your ability unless you choose an alternative method for mortgage loans.

First-time lenders are generally aware of QM loans, which can make investing and becoming a first-time buyer seem impossible. However, that is not the case at all in mortgages. For many borrowers, non-QM loans are a viable and credible option for loans.

There is no doubt that Non-QM mortgages are not subject to the same restrictions as QM mortgages, but this does not mean that borrowers are putting themselves in a dangerous situation because of this. To ensure protection for both the buyer and the lender, several checks and balances are in place.

Obviously, as with any loan, there are both advantages and disadvantages associated with Non-QM lending.

Benefits of Non-QM mortgages

A non-qualified mortgage loan is a good option for borrowers for several reasons, including:

  • Down payment is as low as 10%
  • Reserves are not required (in some cases)
  • Job histories are not necessary (in some cases)
  • Increased flexibility in the underwriting process
  • Calculations of personal income are not required
  • Taking into account rental income (including Airbnb & VRBO)
  • Debt-service coverage ratio (DSCR) of investment properties is low
  • It is possible to have a credit score as low as 620. (580 with compensating factors)

Real estate is a fast-moving market, and options only sometimes last for a while. It is possible to make a timely purchase with a Non-QM mortgage, an alternative method for mortgage loans. Real estate investors and homeowners can only make investment opportunities plausible with non-QM loans.

Risks of Non-QM Mortgage

Regardless of the loan type, there is always a risk of default. In case of a sudden and significant change in your financial situation, you might face difficulties repaying your mortgage. This is the primary risk associated with non-QM mortgages. It is particularly concerning if there is another recession in the economy in the near future.

On the other hand, Non-QM loans provide a balance between reasonable lending standards and flexibility. They serve as a viable option for borrowers who might not have other choices or would otherwise face exorbitant interest rates.

Range of Non-QM Loans To Cater Diverse Borrowers

These non-QM mortgage products offer an alternative method for mortgage loans.

Asset-Based Loans

An asset-based loan lets you borrow money against your existing assets, such as checking and savings, investment, or money market accounts. Individuals with substantial liquid assets are ideal candidates for this type of Non-QM mortgage. Asset-based loans have a reputation for high-interest rates, but we can offer wholesale rates at favorable terms. You are not required to pledge your assets with Mortgage Dove.

Bank Statement Loans

The only requirement for this type of Non-QM loan is a bank statement. Self-employed borrowers, business owners, realtors, consultants, and entrepreneurs may find this a helpful loan. A 12-month bank statement loan is our most popular program, and you can qualify with just two months of bank statements.

Commercial Rental Property Loans

Our loan products are specifically tailored to the needs of real estate investors looking to expand their portfolio to include single-family homes, two-to-four-unit properties, condominiums and townhomes, multi-use properties, and multi-family properties with five to twenty units. Investment loans designed for buy-and-hold investors make the process easier.

Foreign National Loans (ITIN)

For those who do not have a FICO score, a Social Security Number, or an Individual Tax Identification Number (ITIN) , you are still eligible. You must have a VISA or VISA waiver and three active and open trade lines with a two-year history if you are planning to apply.

Jumbo Loans with 10% Down

Although traditional jumbo loans usually require 20% down, we offer near-miss jumbo loans up to $3 million with, for example, 10% down and a debt-to-income ratio of 55%. If you have significant student loans and other "good credit debt types," a 20% down payment jumbo loan may be your best option. High-income earners who wish to invest cash in other assets may also benefit from 10% down jumbo loans.

Interest-Only Home Loans

With our interest-only home loans, you can choose from a 40-year fixed loan, a 30-year fixed loan, a 7/1 arm, or a 5/1 arm. You will only pay interest during the first ten years of the loan. During the loan's lifetime, this can result in significant savings. It's important to keep in mind that you won't be reducing the principal balance while you're in the interest-only period.

No Income Investment Loans

Real estate investors usually do not take advantage of private or hard money loans because of the high-interest rates and long approval times. You can also build your real estate portfolio with fewer setbacks with no-income investment loans available to new and experienced real estate investors. Debt-Service-Coverage-Ratio loans don't take your income into account and instead use the rental income of your property.

Recent Credit Event Loans

Many lenders view recent credit events as red flags, making it difficult to obtain a loan. In some cases, however, we offer loan programs to borrowers who have recently experienced credit events such as foreclosure, short sale, or bankruptcy. Although we provide options for one day after the credit event, loan terms usually improve the longer it has been.

Is a Non-QM mortgage right for you?

Purchasing a house can be a time-consuming and complex process. The situation quickly becomes frustrating if you cannot get a traditional mortgage for some reason. Nevertheless, you do not have to limit yourself to QM loans to get a loan.

If you have been denied a traditional QM loan, a non-QM loan could be your next option. Identify the most common types of borrowers who take out a Non-QM loan to provide a clearer picture of whether this might be the right financing solution for you. Consider this alternative method for mortgage loans if you believe that your credit score, income, or any other factors will prevent you from qualifying for a QM loan.

Applying is generally recommended for a non-QM mortgage in the following situations:

  • Real estate investors
  • Self-employed individuals
  • Owners of small to midsize businesses
  • A borrower seeking interest-only payments or a more flexible DSCR
  • Retirement home buyers who are interested in purchasing a second home
  • People who have recently experienced a credit event (bankruptcy, short sale, foreclosure)
  • "Non-Prime" or "Subprime" borrowers who barely miss the requirements for a QM loan and do not want to delay repayments

Our knowledgeable loan officers can determine if a Non-QM mortgage is the right choice if you fall into one of these categories. Non-QM mortgages are designed to help people who may not qualify for a traditional mortgage due to their unique financial circumstances.

Why Should You Consider a Non-QM Loan?

Finding the best terms for borrowers, including the lowest interest rates, is essential. Although choosing the lowest-rate loan option may seem obvious, there are better choices in the long run. If you are considering a mortgage, ask about the fees associated with the loan and determine which mortgage product best fits your needs.

The first step to finding a Non-QM loan that meets your needs is to educate yourself about the alternative method for mortgage loans.

Non-QM Loans: How to Secure One

To secure your loan, follow these ten simple steps.

Step 1: Your lender will assess your situation and propose loan options (and rates) based on your specific needs.
Step 2: Submit the loan application over the phone or through our secure online application.
Step 3: Establish your rate over the phone based on the agreed-upon terms.
Step 4: Once the application and disclosures are sent, you must review and e-sign them.
Step 5: Send the requested documents back.
Step 6: Underwriting will take care of your paperwork.
Step 7: Assess the property and conduct a termite inspection (if needed).
Step 8: We will request additional information to finalize the documentation once the loan is approved.
Step 9: Have a notary sign your Closing Disclosure/settlement statement after reviewing it with your loan officer.
Step 10: Once everything has been completed, your property purchase or refinance can begin.

Our team is dedicated to providing a swift loan approval process to accommodate your tight deadline. You will receive professional assistance from our experienced loan officers throughout the process.

Choosing A Reliable Lender For Alternative Method For Mortgage Loans

Making the decision to borrow money and invest a significant amount should be carefully considered, especially during an important time in your life. There is no one-size-fits-all Non-QM mortgage lender. The terms offered by some companies are far better than those provided by others.

If you want to enter a Non-QM loan confidently, choose a lender committed to your best interests. It's important to have a lender who values timely approvals and is easy to collaborate with.

In our team, we take pride in providing our customers with a range of flexible loans that work in your favor rather than against you. In addition to offering favorable loan terms, we use advanced technology to simplify the process, provide competitive mortgage rates, and prioritize our customers' satisfaction. In this case, Mortgage Dove is the lender of choice.

Get a Non-QM Loan Today

By working with Mortgage Dove, you can get the loan you need to purchase the house or property you want without all the red tape, stress, and frustration. We understand the importance of getting the right loan for your needs. Our expert staff help you navigate the process with ease.

Contact Mortgage Dove today to begin your Non-QM loan application.