Newfi specializes in Non-Qualified Mortgage (Non-QM) options for borrowers who are looking for a mortgage option with alternative qualifying requirements!
for Non-QM Borrowers
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Qualified Versus Non-Qualified Mortgages
Qualified Mortgages: The Consumer Financial Protection Bureau (CFPB) is a government agency that is responsible for setting the qualifying guidelines that mortgage lenders abide by. Any mortgage option that falls within the CFPB guidelines is considered a Qualified Mortgages (QM). Qualified Mortgages have stricter guidelines surrounding things like debt-to-income, proof of employment, and income documentation among other things.
Non-Qualified Mortgages: Non-Qualified Mortgages are able to offer expanded guidelines because Non-QM lenders are not required to fit within the CFPB guidelines. Non-QM mortgage options often offer borrowers things like longer loan terms, more unique mortgage solutions, and more flexible qualifying requirements. However, these mortgages will still have minimum qualifying requirements for things like credit score, down payment, and debt-to-income.
Who Benefits from Non-QM Mortgages?
Non-QM Mortgages can be a great mortgage solution for borrowers who may not qualify for a mortgage under the CFPB’s standards based on their:
- Self-Employed Borrowers
Many Self-Employed Workers, Contractors, and Small Business Owners document their income using things like bank statements, a 1099, or other income documentation methods. While QM lenders have strict standards around income documentation, Newfi has Non-QM solutions for borrowers that offer more ways to document their income and qualify.
- Borrowers Wanting to Purchase an Investment Property
QM lenders have mortgage options for borrowers looking to purchase an investment property, but they have strict guidelines surrounding things like DTI, income, employment history, and restrictions on the number of investment properties you can own. There are several Non-QM Mortgage options for borrowers that offer relaxed guidelines, making it easier to qualify for an investment property mortgage! At Newfi, our DSCR Loans offers borrowers the ability to qualify for an investment property mortgage without having to worry about providing proof of income or employment, or any personal debt information.
- Borrowers with a High Net Worth
For borrowers with their finances tied to non-liquidated assets, buying a home using QM standards can feel next to impossible. Non-QM Mortgage lenders, like Newfi, allow borrowers to qualify for a mortgage using their assets as income. This allows these individuals to leverage their investments and net worth without having to liquidate any of their assets.
- Borrowers Looking for Lower Monthly Payments
Some borrowers need alternative mortgage options that offer them lower monthly payment options. Non-QM lenders have mortgage solutions with longer loan terms and interest-only options that can help borrowers lower their monthly payment. Newfi has a 40-Year Hybrid Mortgage option available to borrowers. This mortgage offers a fixed interest rate, 40-year loan term, where the first 10 years of the loan is an Interest-Only period. After the interest-only period ends, the loan becomes a standard 30-Year Fixed Rate Mortgage.
Frequently Asked Questions
Non-QM Mortgages offer more flexible guidelines compared to QM options, however these mortgages still have minimum requirements for things like credit score, debt-to-income ratio (DTI), and down payment. You’ll need to ensure that you’re able to fit within the standards set by the lender you’re choosing to work with.
- Specialized Mortgage Options to Fit More Unique Situations
- Longer Loan Terms Available
- Flexible Requirements for Qualifying
- In-House Underwriting Decisions, Quick Process
- Alternative Income Documentation Options
- Higher Down Payment Requirements
- Higher Interest Rates
Because everyone has their own unique situation, we recommend speaking to a loan advisor about your options as your first step. Go to newfi.com/get-started or fill out the form on this page for a free consultation with one of our licensed loan advisors!