What is a Non-Qualified Mortgage Loan?

A Non-Qualified Mortgage, often known as a non-QM loan, allows you to qualify using techniques other than the typical income verification necessary for most loans.  They are so-called because they do not meet the Consumer Financial Protection Bureau’s (CFPB) requirements for a qualifying mortgage.  Non-QM loans can include many mortgages, including those with terms longer than 30 years and those that fail to meet agency-standard documentation requirements.

While non-QM loans may have higher fees and be perceived as riskier due to more flexible qualification guidelines, they have evolved through time to give safe alternative financing options.  They are especially beneficial for those who may not qualify for a loan based on traditional income verification or who have a non-traditional income source, opening up real estate investment prospects to a broader set of people.

Capital Home Mortgage offers homebuyers pursuing non-QM loans a substantial advantage.   These loans are designed for those who cannot meet the stringent requirements for a conventional mortgage, such as self-employed individuals, real estate investors, and those with exceptional financial circumstances.  Non-QM loans provide flexibility, enabling borrowers to purchase or refinance without W2s by utilizing 1099s, bank statements, assets, or debt coverage ratios.  Even though they typically carry higher interest rates due to the increased risk, they provide an invaluable opportunity for those who may not qualify for conventional loans.

Call (800) 804-5181 to speak with our Home Loan Specialists.

Types of Non-QM Home Loans

No-Doc Mortgage Loans

No-Doc Loans are non-QM loans popular among homebuyers with unconventional incomes. As the name implies, these loans do not require income documentation.

DSCR Mortgage Loans

Debt Service Coverage Ratio (DSCR) loans are another type of no-income documentation loan in which the subject property’s rent must cover the mortgage payment and additional housing expenses. This form of non-QM loan is quite prevalent.

Interest-Only Loans

Some non-QM loans offer interest-only payments, in which lenders do not demand you to pay the principal for a set length of time, which can assist some borrowers in qualifying for the loan.

Bank Statement Loans

These non-QM loans allow you to qualify using bank statements or assets as income, benefiting self-employed individuals or gig workers who may lack standard income verification.

Foreign National Loans

These are intended for non-citizen foreign nationals who have established residency in the United States but have yet to become citizens. Applicants must show proof of residence in the country for at least three years and pass a background check.

Customized Non-QM Loans

These loans are tailored to the needs of individual borrowers. Such loans are frequently used by real estate investors looking for fixer-uppers that do not meet the habitability requirements of traditional mortgage loans.

Apply for a Non-QM Loan with Capital Home Mortgage

Capital Home Mortgage can guide purchasers through this non-traditional mortgage path, offering individualized solutions to resolve specific financial circumstances. Their extensive experience and dedication to customer service make them a dependable option for non-QM loans.  Call (800) 804-5181 to speak with our Home Loan Specialists.