Are you interested in buying a home, but worried that you may not be able to qualify for financing because you have a credit rating that is less than ideal or have a nontraditional source of income? Non-QM loans help people with unique financial circumstances qualify for a home loan based on alternative eligibility criteria. If you are located in Kansas City, Missouri, and interested in purchasing a property and want a better understanding of the financing options that may be available to you, KC Investor Funding is here to help. Read on to learn more about how to purchase a property by using a non-QM loan.
How Do Non-QM Loans Work?
Non-QM loans are intended to assist borrowers that have uncommon financial circumstances acquire a home loan and do not meet the specific requirements needed to be classified as a traditional qualified mortgage. With traditional qualified mortgages, a lender analyzes factors such as a borrower’s credit, employment status, income, etc. to determine if they are eligible for a home loan. A mortgage cannot be considered “qualified” if there is evidence of risk in a borrower’s history. A non-QM loan follows different guidelines than a conventional loan to determine eligibility, and lending is not solely based on standard loan requirements like credit history. Instead, non-QM loans consider other indicators when determining eligibility to get a better picture of a borrower’s financial situation for homebuyers who may have past credit issues or who have atypical forms of income. Although there are no set eligibility requirements for non-QM loans, they will typically require a credit score of 760 or higher, a down payment of 20 percent, and an average debt-to-income ratio (DTI) of 37 percent.
What Are the Benefits of a Non-QM Mortgage?
Non-QM mortgages can be advantageous for a number of borrowers because they make it easier for people that are self-employed or people that have an untraditional form of income qualify for a mortgage by letting them provide alternative documentation to acquire a loan. Additionally, non-QM loans have less restrictive credit requirements, making it possible for borrowers that have had previous financial issues such as a foreclosure or bankruptcy qualify for a home loan. They also offer many fixed and adjustable rate options to help make home ownership a possibility. The types of borrowers that typically benefit from a non-QM loan include borrowers that are self-employed, real estate investors, foreign nationals, and both prime and non-prime borrowers.
Apply For a Non-QM Loan Today
If you have unique financial circumstances that have made you hesitant to apply for a mortgage, and are interested in learning more about the different mortgage options available to you in Kansas City, Missouri, contact KC Investor Funding today for a consultation.