Mortgage Blog

Options for the Investor

July 10, 2024 | Posted by: Michael McMullen

When it comes to real estate investment, having a variety of financing options is crucial. Non-QM (non-qualified mortgage) loans offer flexibility for investors who may not qualify for traditional mortgages. Let’s explore why non-QM loans are a great choice for investors:

1. What Are Non-QM Loans?
• Non-QM loans don’t conform to the strict criteria set by the Consumer Financial Protection Bureau (CFPB) for conventional mortgages.
• These loans allow lenders to be more flexible with their standards, making them ideal for unique situations.
• Non-QM loans may accept higher debt-to-income ratios (DTI) and lower credit scores than traditional mortgages.
• Some types even allow interest-only payments, which isn’t possible with QM loans¹.
2. Who Benefits from Non-QM Loans?
• Entrepreneurs: Self-employed individuals, freelancers, and gig workers.
• Investors: Real estate investors with multiple properties or unconventional income sources.
• High-Net-Worth Individuals: Those with liquid assets seeking investment opportunities.
• Retirees: Individuals with unique circumstances.
• Bad Credit Borrowers: Non-QM loans offer more lenient credit requirements¹.
3. Advantages of Non-QM Loans:
• Diverse Loan Types: Non-QM loans include bank statement loans, asset-based loans, investor cash flow loans, and more.
• Less Strict Credit Requirements: Lenders are more accommodating, allowing for unique financial situations.

In summary, non-QM loans provide alternative financing options for investors, especially those with unconventional income or unique property types. They’re America’s best-kept secret in the mortgage world! ????????????

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