Corpus Christi Non-Qualified Mortgage

If you’re looking to buy a home in Corpus Christi but are worried that you can’t qualify for a traditional mortgage, a non-qualified mortgage may be worth considering. Qualifying for a mortgage can be difficult, especially with all those stringent requirements regarding credit scores, down payments, debt-to-income ratios, and ability-to-repay rule. 

The excellent news is that borrowers who cannot fit the qualifying mortgage criteria can still get a loan through a non-qualified mortgage with Capital Home Mortgage. It’s essential to understand how this type of loan works so you can decide if it is a worthwhile financing option for you.

What is a Non-QM Loan?

A non-qualified mortgage (non-QM) is an alternative mortgage for borrowers who cannot meet standard requirements at the time of application. 

A NonQM loan still complies with the standard requirements. The borrower’s qualifications differ from what is required. Hence, lenders will try to justify if the borrower’s qualifications are suitable alternatives to the standard requirements.

Qualification Requirements for Non-QM Loans

Lenders are generally more flexible in accepting different kinds of requirement proofs from borrowers. Those who aren’t satisfied with the presented documents can still ask for more evidence to satisfy the standard requirements. Let’s discuss below the non-QM loan requirements.

• Income

Qualifying mortgages often ask for pay stubs, W-2 statements, and tax returns as proof of income. For example, some self-employed borrowers or small businesses don’t have audited financial statements to show as proof of business income. Some borrowers also have income without proper documentation, such as babysitting, house cleaner, rideshare driver, etc. 

Non-QM loans fit these kinds of borrowers. However, the lender’s underwriters will still perform a critical review of these requirements. They can either deny it or ask you to provide more evidence of income.

• Credit Score and Down Payment

The credit score requirement for non-QM loans varies from one investor to another. Ideally, you must have at least 620, just like in qualifying mortgages. But if it’s lower than 620, lenders can accept a lower score in exchange for higher interest rates to compensate for the risk. However, you can offset the adverse effect of low credit scores with a higher down payment. Giving a large down payment reduces the risk for lenders, and they might reconsider your low credit score. Hence, you should find a lender willing to work with you to find the best deal based on your credit report.

If you have a low down payment, you must be willing to pay private mortgage insurance. That’s why saving enough money for a down payment to skip mortgage insurance is highly recommended.

Get a Non-QM Loan in Corpus Christi

Capital Home Mortgage is a direct mortgage lender providing a comprehensive lineup of home loan programs in Corpus Christi. From prequalification to funding, we handle every aspect of the loan process and ensure that you have all the professional assistance you need at every stage. 

That dream home may be yours even if you can’t secure traditional home loans right now. Call us at (361) 724-3166 to learn more about obtaining a non-qualified mortgage in Corpus Christi.