Midland Non-Qualified Mortgage

You might need help getting approved for a conventional mortgage loan if you have irregular income or are self-employed. To qualify for a traditional loan, most lenders require regular paychecks or proof of steady income, which is difficult to provide if you don’t have a traditional job.

For those who don’t bring in ordinary income and find conventional loans too tricky to obtain, Capital Home Mortgage can help you acquire the residential or investment property you desire with a non-qualified mortgage.

What is a Non-Qualified Mortgage?

A non-qualified mortgage (non-QM) is a type of mortgage intended to assist homebuyers who cannot satisfy the stringent requirements of a qualifying mortgage. You may need to look into non-qualified mortgages if you are self-employed or lack some of the required documentation for a conventional loan.

Considering the requirements for conventional, qualifying mortgages is the best way to make sense of non-qualifying mortgages. 

You must fulfill the following criteria to be eligible for a conventional mortgage:

• Income: 

You must be able to demonstrate your income through pay stubs, W-2s, and tax returns.

• Debt-to-income ratio: 

You must have a debt-to-income ratio (DTI) of no more than 43%. This portion of your monthly income is allocated to paying down debt.

• No high-risk features: 

Interest-only loans, negative amortization, and balloon payments are all examples of potentially risky loan terms.

• Loan term: 

The loan repayment term must be at most 30 years.

If you don’t or can’t meet all the criteria above, you may want to speak with a  Capital Home Mortgage loan officer and look into non-qualified mortgages.

Who Benefits from Non-Qualified Mortgage Loans?

If you cannot obtain a qualifying mortgage despite having sufficient income to make your mortgage payments on time and in full each month, a non-QM may be a good option.

Until you meet standard mortgage requirements and can refinance to a traditional loan, a non-qualified mortgage may offer a temporary lending solution.

The following types of borrowers could benefit from a non-QM loan:

• Retirees

• Self-employed individuals

• Real estate investors

• Business owners

• Foreign nationals

• Investors

• Those who have high assets but low income

• Those with a high debt-to-income ratio

• Those with less-than-perfect credit

The existence of non-QMs demonstrates that a wide variety of potential homebuyers can access mortgage financing. Even if you have a low income or a high debt-to-income ratio, it is possible to get a mortgage.

Are Non-Qualified Mortgages Safe?

Knowing that non-QMs are not the same as subprime mortgages will ease your concerns about their safety. There is a misperception that non-QM loans are bad loans because of the housing meltdown during the Great Recession. Today’s non-QMs, however, have their own set of requirements, just like qualified mortgages. 

Apart from the loan documents, the lending process is similar. The “Ability to Repay Rule” applies to both types of loans. Lenders are vulnerable to legal action if they don’t take reasonable steps to verify a borrower’s ability to repay a loan. A nonQM mortgage is on par with any other type of loan.

Buy Your Dream Home Today!

Capital Home Mortgage provides homebuyers in Midland and countrywide with creative ways to finance their homes. 

If you don’t think you’d get approved for a conventional mortgage but still want to buy a home or refinance your current one, we can help. Our non-qualified mortgage products will help you achieve your real estate investment goals or purchase a house you can call your own. We’ll even take care of every loan process step for you.

Contact our professional loan officers at (432) 218-4828 for inquiries and more information about our mortgage loan offers and requirements.