Non-QM Mortgage

Non-QM mortgage

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Alternative for traditional mortgage - Non-QM mortgage

What is Non-QM?

A non-qualified mortgage (non-QM) is a type of mortgage loan that does not meet the qualified mortgage (QM) criteria established by the Consumer Financial Protection Bureau (CFPB) under the Dodd-Frank Wall Street Reform and Consumer Protection Act. The QM guidelines were implemented to ensure that lenders offer mortgage loans with reasonable terms and to protect consumers from risky lending practices that contributed to the 2008 financial crisis.

Non-QM loans are designed for borrowers who may not meet the strict requirements of qualified mortgages, but still have the ability to repay the loan. These loans are typically offered by specialized lenders and provide alternative options for borrowers who may have unique financial situations, such as self-employed individuals, those with non-traditional income sources, or those with a higher debt-to-income ratio.

Unlike qualified mortgages, non-QM loans may have features that were considered risky prior to the implementation of stricter lending regulations. For example, non-QM loans may include interest-only payments, adjustable interest rates, or the ability to include non-traditional income sources for qualification purposes.

Non-QM loans often require a more comprehensive evaluation of the borrower’s financial profile, including a detailed analysis of income, assets, credit history, and other factors. Lenders offering non-QM loans typically consider the borrower’s overall financial picture and ability to repay, rather than relying solely on standard criteria such as debt-to-income ratio or credit score.

Since non-QM loans do not comply with the QM guidelines, lenders that offer these loans may assume more risk and may charge higher interest rates or fees to compensate for the increased risk. Borrowers considering a non-QM loan should carefully evaluate the terms and costs associated with the loan and ensure they have a thorough understanding of the loan terms and potential risks involved.

It’s important to note that regulations and guidelines can change over time, so you should consult with a qualified mortgage professional to get the most up-to-date information on non-QM loans and their eligibility.

Contact us today to find out more details if non-QM loan fits your needs.

Do I Qualify?

Non-QM mortgage does not follow FHA, VA, USDA, Fannie Mae or Freddie Mac guidelines. It has its own set of guidelines based on income/employment, asset, credit, eligibility and collateral (property). Here are few examples of how Non-QM loan being utilized to help homebuyer:

  1. Income/employment challenges: Self-employed borrower who has lots of write offs on tax returns can utilize the bank statements program where lender will use 50% of the business deposits for last 12-24 months as income versus net income per your tax returns. Also, self-employment history less than 24 months (over 12 months) is also acceptable with additional compensating factors.
  2. Asset: Retiree/borrower who has huge amount of liquid/partially liquid asset (cash, stocks, retirement account, crypto, etc) can also be used as source of income without needing to liquidate.
  3. Credit: We all understand that not all borrowers have perfect credit history. We all go through life events. For those who have experienced tough time with bankruptcy, foreclosure, or short sale, may be denied by conventional or government loan programs due to waiting period. With Non-QM program, it has way shorter waiting period and some do not have seasoning requirement for mortgage foreclosures.
  4. Eligibility: Most of title vesting for residential is in individual name. However, if you are investor who would like to protect your personal wealth from lawsuit or privacy, Non-QM loan would allow you to vest in LLC or corporation.
  5. Collateral: If you are purchasing a condo, townhome or plan unit development (PUD), lender will have to evaluate the condo/PUD projects to make it warrantable based on conventional or FHA/VA guidelines. Non-QM has unique guidelines for condo project, and some non-warrantable features can be accepted by Non-QM program.
Do I Qualify?

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  • Fixed Rates

    Fixed Rates

  • Adjustable Rates Mortgage (ARM)

    Adjustable Rates
    Mortgage (ARM)

  • Conforming Loans


  • Jumbo & Super Jumbo Loans

    Jumbo & Super
    Jumbo Loans

  • FHA, VA, & USDA Loans

    FHA, VA, & USDA

  • Terms from 5 to 30 Years

    Terms from 5 to
    30 Years

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