Non-qualified mortgages are a group of mortgage loans which do not meet the features required by the government lending programs or the conventional loan market of FNMA and Freddie Mac. They are for buyers or persons refinancing who for any number of reasons will not meet the underwriting criteria for a conventional loan or a government loan program. Non-qualified mortgages help:
Borrowers who need options beyond typical conventional guidelines and Prime Jumbo guidelines. Allows use of cash flow via business bank deposits or express income documentation for wage earners or self-employed borrowers.
Expanded credit programs to provide more options for borrowers with previous credit events such as bankruptcy, short sales, or a foreclosure.
The ability to qualify a borrower using only their financial assets also called an asset utilization loan.
These loans do require good credit with scores 620 or higher depending on the program, a higher down payment minimum of 10% but some require a 20% down payment, and the interest rate will be higher than the vanilla conventional loan borrower.
The difference between these loans and the sub-prime loans in the 1990’s is there are strict credit criteria, borrowers need to demonstrate an ability to repay the loans via full documentation, cash flow, or high liquid assets balances and demonstrate a good credit history.
If you fit one of these categories or know someone who does give me a call at 407-230-6510 or email email@example.com.
Stuart Peisner is a licensed mortgage loan originator since 1988 and currently works for Paramount Residential Mortgage Group, a national mortgage lender licensed in 43 states and closing over $1 billion in loans each month.