Waco Non-Qualified Mortgages

If you’re looking for a mortgage, you’ve probably heard of both qualified and non-qualified mortgages.

Qualified mortgages, or QM loans, were created after the 2008 housing market collapse. These loans protect both lenders and borrowers by establishing guidelines that prevent lenders from issuing loans to borrowers that can’t repay them. 

The federal government’s strict lending requirements make it difficult for certain types of borrowers to qualify for QM loans. However, not all hope is lost because those denied a qualified mortgage can always try for a non-qualified mortgage loan.

What is a Non-Qualified Mortgage?

A non-qualified or non-QM loan is a mortgage product that doesn’t conform to the lending guidelines set by the  Consumer Financial Protection Bureau. Home loans in this category usually have more specific eligibility and qualification requirements, which makes them an excellent alternative for people who can’t get a conventional loan. 

It may be difficult for real estate investors, foreign nationals, self-employed individuals, and those with poor credit to qualify for a conventional loan. This is where a non-QM loan can come in handy. This financing solution is meant to help a particular group of borrowers realize their dream of owning a home.

Non-Qualified Mortgage Options for Waco, TX Homebuyers

Are you considering getting a non-qualified mortgage to pay for your new home or rental property? Like every other type of mortgage loan, non-qualified mortgages come in different types. You’ll have to be familiar with each of these options to increase your chances of approval:

• Bank Statement Loans

In a bank statement loan, lenders review your bank statements to get a good idea of your income and see if it qualifies you for non-qualified mortgage financing. Borrowers must show that they have been self-employed for at least two years and provide 12 months of bank statements. This is the non-QM loan to go for if you are self-employed or a business owner.

• Investor Cash Flow Program

Most private and hard money loans have high-interest rates and take a long time to get approved, which is disadvantageous for most real estate investors. 

The criteria for getting a loan through the Investor Cash Flow Program are more flexible, making it simpler and faster for investors to obtain financing. These loans typically use debt service coverage ratios. Borrowers are qualified based on how much rental income their properties earn instead of personal income.

• Asset-Based Loans

The asset qualifier loan is designed for borrowers with substantial liquid assets who may not qualify for a conventional mortgage. This program compares the buyer’s liquid assets to the proposed loan amount and other recurring monthly obligations. There is no need for borrowers to submit income-related documentation.

Asset-based loans could be very beneficial for retirees who do not have the typical income requirements but can show substantial liquid assets.

• Foreign National Loans 

These loans are designed to help foreign national borrowers deal with credit and assets verification issues so that loans can be funded on time and with as little trouble as possible.

Similar to our investor cash flow program, qualification is based on the property’s cash flow. Borrowers do not need to show any proof of income or employment.

Are Non-Qualified Mortgages Risky?

Non-QM loans developed a bad reputation because of the housing crisis during the Great Recession. However, today’s non-QM loans are not like the subprime mortgages of the past. 

While not as strict as qualified mortgages, non-QM loans also follow lending guidelines that safeguard the interests of both the borrower and the lender. Capital Home Mortgage’s qualified and non-qualified loans have the same process except for the required documentation.

Apply for a Waco Non-Qualified Loan Today!

Capital Home Mortgage has a wide range of non-qualified mortgage options, catering to home buyers’ diverse needs and requirements. Our clients commend us for our virtually seamless application process. As a direct mortgage lender in Waco, we approve and close loans much faster! 

Take a step closer to owning your dream home. Call us at (254) 213-7343 for a free quote.