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NONQM Loans : The Benefits for Borrowers
The key benefit of NONQM loans is that they offer opportunities to borrowers who would not otherwise meet the mortgage requirement . NonQualified Mortgage Loans provide muchneeded loan financing for millions of hardworking Americans , including selfemployed people and smallbusiness owners who have worked hard to achieve success but are not eligible for QM loans .
Below are some of the benefits NON QM loans for borrowers :
How can a Real Estate Investor Qualify for a NONQM Loan ?
If you are a real estate investor that has an investment property and are looking for a quick turnaround without stringent guidelines , NONQM loans may be better for you — NONQM loans do not need to abide by these strict guidelines ! Bottom line = this means that NONQM lenders can provide faster service and approval to more types of real estate investment opportunities . Private lenders who utilize QM loans must first qualify a mortgage borrower ’ s income , liabilities , and monthly debt payments to determine whether the borrower can successfully pay back the loan in the future . To successfully qualify for a QM loan , real estate investors must fit the strict requirements set by the Consumer Financial Protection Bureau . This approval process requires borrowers to submit extensive documentation concerning their credit history , income , assets , and monthly debt payments , which usually takes well over a month to complete .
NONQM and Private Money lenders understand that everyone ’ s situation is
different and that to a traditional financial institution ( like a bank ) some borrowers may not present like a qualified candidate for a loan . This restriction could be due to the borrower ' s employment status , income , credit history , and liquid asset requirements . However , with a nonqualified mortgage , private lenders focus on high credit score , investing experience , and liquid assets .
As a result , NONQM loans ’ lax restrictions make them ideal for these types of real estate investors :
SelfEmployed Investors : Especially in light of the unprecedented year with COVID19 , we completely understand how difficult it is to find steady income . These types of loan programs are based on the value of the property itself or the borrower ’ s credit score and liquid assets .
Foreign Nationals : Governmentbacked loans typically require proof of a U . S . Social Security number or a W2 ( which is a U . S . tax form ). Because NONQM loans don ’ t have such requirements , they are ideal for foreign nationals who are in the States on a visa and are looking to invest .
• Looser , more versatile underwriting and guidelines .
• Ability to close faster than a QM loan .
• Ideal for 14 family investment properties .
• NODOC mortgage loan : does not require income verification or tax returns .
• Selfemployed people are top candidates for NONQM loans .
For specific borrowers with unique income sources or a high DTI , a NONQM loan will enable them to obtain the money they need . NONQM lenders also set standards for nonqualified mortgage loan borrowers and need to determine their potential to repay .
This type of mortgage loan is ideal for a wide variety of potential borrowers and can be used to buy commercial and investment assets . It is advisable to contact a certified loan officer to determine your qualification for a NONQM loan , so they can review your profile to ascertain if this product is perfect for you .
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