To understand what a non-qualified mortgage is, you first need to understand what a qualified mortgage is. A qualified mortgage meets strict guidelines that were set in place by the government. These guidelines that were inititated are related to a borrowers ability to repay the loan.
The Qualified Mortgage Guidelines are:
- No loan term can exceed 30 years (no 40 or 50 year mortgages).
- Points and fees can not exceed 3% of the loan amount.
- The DTI ratio (debt-to-income ratio) must not exceed 43%.
- No balloon mortgages.
- No interest only loans.
- No negative amortization mortgages.
Therefore, a loan that does not meet all of the above requirements is a non-qualifed mortgage (also commonly referred to as a non-QM loan).
The main difference between a qualified mortgage and non-qualified mortgage is if whether or not the government will protect lawsuits against lenders from borrowers who default on their loan. A lender must ensure that a mortgage meets all the QM guidelines, otherwise the government will not defend them in court.
For borrowers who do not meet the qualified mortgage guidelines, they will need to apply for a non-qualified mortgage loan. We work with nearly ever non-qualified mortgage lender (which are often called non-prime lenders, as in our website’s name). We can help you see if you qualify and also compare mortgage quotes.
The demand for non-QM loans is on the rise, and mortgage lenders have taken notice. Our network of mortgage lenders offer many of the best non-qm loan programs available.
Below are some of the best non-qualified mortgage lenders:
3.) Athas Capital
6.) On Q Financial
9.) US Bank
11.) Fremont Bank
12.) Oak Tree Wholesale
Please note: We are not affiliated with all mortgage lenders mentioned in our website. We simply provide a free service to match consumers with mortgage lenders. You may visit the above lenders websites to apply with them, or we can help you compare mortgage quotes from multiple lenders.