Section 3: NON-QM Loan Benefits
NON-QM Loan Benefits
1. Loan Options
The single best benefit of a non-qm loan is that there are many options outside of the normal lending requirements. There is much more flexibility for you to get into your dream home.
- Non-Docs
No-doc mortgages were the most popular loan program prior to the 2008 financial crisis. We now have no-doc home loans in full force for borrowers who do not have qualified income and need stated income mortgages.
- 12 Months
The 12-month bank statement mortgage program requires a 20% down payment or 80% loan-to-value. For borrowers who want to put less than a 20% down payment or higher than an 80% loan-to-value, then they may want to consider the 24-month bank statement mortgage program.
- 12-24 months
12 and 24-month bank statement mortgages are for self-employed borrowers and/or business owners. Federal income tax returns are not required. Non-QM wholesale mortgage lenders will average the past 12 months of bank statement deposits. The average monthly deposit over the past 12 months is the income used for the borrower. Withdrawals do not matter. There are two different types of bank statement mortgages. The 12-month and 24-month bank statement mortgage loan program.
- Full Doc Non-QM Mortgages
- 1 year of income documentation for full doc programs
- Purchases
- Rate and Term Refinance up to 90% LTV with 720 scores
- Cash-out refinance up to 80% LTV with 700 credit score
- Near Prime Jumbo Mortgages
- Purchase
- Rate and Term 740 credit score up to 90% LTV up to $1.5 million dollar loan amount
- 700 credit score up to 90% loan-to-value up to $1 million dollar loan amount
- 40% DTI at 90% LTV
- 43% debt to income ratio up to 85% loan-to-value or less
- 80% LTV or less 6 moths reserves
- 80-85% loan-to-value require 9 months reserves
- 86-90% loan-to-value require 12 months of reserves
- For every additional finance property, 6 months of reserves for each other financed property
- Asset Depletion Loan Program
- 90 days seasoned, 100% of the value, divided by 60 months for monthly income
- Purchase
- Rate and Term Refinance at 80% LTV with a 680 credit score
- Cash-out refinance up to 75% LTV with a 720 credit score
- Must have 110% in assets of the loan amount plus reserve requirements
- Gifts are not allowed on this mortgage loan program
- Fannie Mae only – C1 conventional Agency
- Minimum 620 credit score
- Must have approved findings
- No manual underwriting
- 95% maximum loan-to-value
- Cash-out transaction cashback can be used toward 3 of the 6 months of reserves requirement, except E1
- 10-year Interest-Only period available (40-year total term)
- NO credit event in the last 24 months
- If the borrower had a credit event in the past 24-48 months, then the maximum loan-to-value is lowered to 65% LTV, and the reserve requirements are increased by 6 months
- Non-Warrantable Condos up to 85%
- Condotels up to 70% LTV
- 100% gift allowed on primary home mortgage loans
- The gift allowed on investment property financing with the borrower putting down 5% of own funds
- 6 months of reserves on up to a maximum of $2 million loan amount
- Over $2 million loan amounts require 12 months of reserves
- 1X30 on mortgage from last 6 to 12 months
- 0X30 for most previous 6 months
- Up to 50% DTI, except E1 max 40-43% and C1 whatever approved eligible findings per automated underwriting system (AUS) allow
- Transferred appraisals accepted
2. Private Mortgage Insurance (PMI)
There is no mortgage insurance required on Non-QM loans and bank statement mortgage loans for self-employed borrowers: Borrowers can also explore other mortgage loan programs such as taking out a VA loan.
3. Loan Limit
The maximum loan amount for the Non-QM mortgage loan programs is currently $1,500,000.
4. Lifetime Benefit
Non-QM loans get you into one of the best loan which you will be able to use and benefit from for the rest of your life.
5. Assumability
In most cases, Qualified Loans are non-assumable. There is one QM loan that is assumable and that is the Veterans Affairs’ mortgage.
Common Questions on Conventional Loans
- Are Conventional loans better?
Everyone has unique needs for their buying situation. Although Non-QM loans are very competitive, they are not always the best choice for the consumer. Because of that we recommend you talk to your loan professional for your specific needs.
- Are there any benefits to sellers?
Non-QM loan buyers have the lease restrictions when it comes to buying and is typically a sought-after product when looking at offers.
- What are Orbit Realty’s and Orbit Home loans benefits?
With Orbit Realty you and Orbit home loans you get the benefit of working with a team that is highly trained and qualified. Okay, maybe every company says they have that, but the truth is that only 10% of companies nation-wide have both a real estate and mortgage company combined and because of that we are able to be one of the most competitive lenders on the market. We are also able to pass savings onto you buy not having to change additional fees that you often see with other lenders.
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