There are a lot of people who dream of owning a home one day, but few people have the cash to purchase a home outright. Therefore, you will probably need to take out a loan to buy a house; however, what happens if you cannot qualify for a loan with the traditional loan requirements? If you are not a W2 employee, you may need to go with a Non-QM loan. What do you need to know?
What Is A Non-QM Loan?
A Non-QM loan is a non-qualified mortgage. What this means is that you do not meet the standard requirements to qualify for a mortgage. Some of the factors that you need to meet to qualify for a traditional mortgage include meeting the necessary income requirements, having pay stubs, having a debt-to-income ratio that satisfies the lender’s requirements, and taking out a mortgage that is 30 years or less. Your fees also cannot be more than 3 percent of the value of the loan. There is a common misconception that having a Non-QM loan is bad, but that is not the case. Everyone is in a different employment situation, and a Non-QM loan could be the right move for some people.
Why Take Out A Non-QM Loan?
There are a few reasons why you should consider taking out a Non-QM loan. First, they require less documentation than other mortgages, so you might not need to produce W2s or employment verification to qualify for a loan. You also may not have to meet strict credit score requirements. If your credit score is not the best, you can still take out a home loan with a Non-QM option.
Who Should Get A Non-QM Loan?
There are many people who should consider taking out a Non-QM loan. If you plan on applying for a home loan without proof of income, this might be the right option. Furthermore, if you are a freelancer, or if you are not a W-2 employee, this could be a solid choice. There are plenty of people who could benefit from this loan, and it is important to work with a professional who can help you.
ShareSEP
About the Author:
Babak Moghaddam graduated from University of Southern California in 1985. He entered the mortgage industry as a compliance auditor at the Bank of New York in 1986 and completed his masters in Business Administration two years later. After seventeen years in the traditional mortgage banking world Babak finally transformed this vision into his own practice in 2002 when he formed Charter Pacific Lending Corp, a mortgage company that has provided over $900 Million in residential real estate loans throughout Southern California. Babak and his team do things a little differently than other mortgage providers. They work as financial advisors, because they have come to realize that a mortgage is a very powerful financial tool. And just like any other financial tool, it should be managed as part of the overall financial management plan to reach every home owner’s long and short-term financial goals much faster. You can contact Babak for a free consultation and strategy session at (800) 322-1217 X103.