San Antonio Non-Qualified Mortgage Loans

Banks and lending institutions impose different requirements for loans, many of which might be difficult for the average American to obtain. On top of that, lenders can still charge overlays, making it even harder to access home loans. 

Suppose your current financial background doesn’t fit the eligibility requirements for traditional loans. In that case, you may be able to obtain the financing you need with a non-qualified (non-QM) mortgage instead. 

At Capital Home Mortgage, we offer non-QM loans to borrowers in San Antonio. This type of mortgage is an excellent source of financing for those with different employment characteristics or income-earning capabilities.

What is a Non-QM Loan?

Unlike conventional and FHA loans, a non-qualified mortgage loan is a non-traditional loan. These loans don’t comply with the minimum requirements set by the Feds. However, lenders often pattern their qualifications with standard loan requirements but modify some of them to match the kind of loan product. 

Non-QM loans are loans for borrowers with hard-to-verify income or those with unique credit issues.

Qualification Requirements for Non-QM Loans

Requirements are flexible for non-QM loans but can be similar to standard loans. Since non-QM loans can accept borrowers with an uncommon situation, employment, and credit backgrounds, expect lenders to ask for extensive documentation requirements that lenders will not ask if you apply for a traditional loan. 

Let’s discuss the three standard requirements in every non-QM loan.

• Income and Employment

If you are gainfully employed but have past credit issues, non-QM lenders will still ask for proof of income, such as pay stubs, W-2 statements, and income tax returns. Business owners must submit bank and financial statements as proof of income and livelihood. However, here’s where non-QM loans come in. 

Lenders can ask for alternative documentation if you don’t have pay stubs or bank statements as proof. That’s why you need to find a lender willing to work with you based on your situation. For example, you can submit evidence of remittances if you’re receiving financial support from a loved one or relative. 

• Debt-to-income Ratio

Standard loans often require DTI to be between 36% to 43% to qualify. However, non-QM lenders can accept higher DTI ratios of 50% or more. 

The debt-to-income (DTI) on Non-Qualified Mortgage loans varies from one investor to another. Some may go up to 50%, and others may have a ceiling of 45% or less.

• Credit Score

Credit scores as low as 500 may suffice for FHA home loans. However, that would require a 10% down payment. Non-QM loans require a higher FICO score. You may negotiate the down payment that typically requires 10 – 20% of the purchase price, if not more, depending upon your situation.

Get a Non-Qualified Mortgage Today

Apply for a non-QM mortgage in San Antonio with Capital Home Mortgage today. Call (210) 634-1225 to get started with a no-obligation quote.