Non-QM Loans: Alternative Income Documentation and No Income Verified Mortgages

Non-QM Loans and Non-QM Mortgage in New YorkRecently, many lenders in New York and Pennsylvania have started rolling out Non-QM loans (Non-Qualified mortgage), which are mortgages underwritten to investor guidelines that are not sold to the government.

With Non-QM loans we are still required to verify an ability to repay the mortgage but we can do it with alternative standards.

To verify the borrower's income and cash flow we can use alternative documentation options like a bank statement method, which is the most popular version of Non-QM loans.

Give Artisan Mortgage Company a call today at 800-499-0141, or fill out the form to see if a Non-QM mortgage is right for your home financing needs or to discuss other programs you may qualify.

What is a Non-QM Mortgage Loan?

Recently we have seen a push into the market with some Non-QM loans.

A little background here, post mortgage meltdown the government developed a standardized guideline for what mortgages are considered Qualified Mortgages or QM, and they follow rules set by the CFPB (Consumer Financial Protection Bureau) www.consumerfinance.gov

This designation gave banks assurance that if the loans they issued hits certain standards they would be considered Qualified Mortgages. This would give banks guarantees that these loans could be sold to the government without concerns of buy backs from the government. This is what gives us the term QM or Qualified Mortgage.

The most popular version of Non-QM loans in New York and Pennsylvania is a bank statement method. We don’t need paystubs, W2’s or Tax Returns, but can verify income, cash flow and ability to repay using bank statement analysis. This option is designed for self-employed borrowers who prefer to avoid potentially complicated tax returns. You can utilize either personal or business bank statements to qualify for the mortgage. This has created other avenues for qualification that have not been seen in recent years.

For Investment properties not occupied by the borrower, we can now use rental income as a cash flow analysis option. For many professional real estate investors this program has made a world of difference allowing a common-sense approach to many mortgages that did not fit the box. The basics here are simple, if the rent or market rent of the subject property covers the mortgage, taxes and insurance, you qualify. Yes, we are looking for applicants with good credit and a history of managing rental properties, but these mortgages are simple, easy and straight forward.

Non-QM Loans Requirements & Guidelines

In addition to the alternative documentation options, these new Non-QM loans are also providing flexibility in other areas. Credit standards are independent to the investor. One prime example is the ability to close investment properties in the an LLC, something that can’t be done in the QM marketplace.

We feel the introduction of these programs are just the tip of the iceberg. Private investors are seeing the potential for high quality mortgages underwritten to standards outside the government’s box that are sound, stable and profitable. There are brighter days on the horizon for many who found it difficult to qualify for a QM mortgage.

— Jim Barry, CMC

Whether relocating from out of state, buying your first home, or investing in vacation property, the experienced loan officers at Artisan Mortgage are ready to help you secure your piece of the American dream with a comprehensive variety of home financing products including Non-QM loans and competitively priced rates in New York and Pennsylvania. Contact us today for more information.