What is a Non-QM Loan?
A Non-QM loan is a type of mortgage loan that is not backed by Fannie Mae or Freddie Mac, meaning that it is not subject to the same underwriting guidelines as traditional mortgage loans. Non-qualified mortgages often do not meet standard mortgage underwriting rules, such as debt-to-income ratio requirements. They are still approved due to other factors such as the borrower's credit score or income history.

Applying for a Non-QM Loan
Applying for a mortgage can be easy if you're a self-employed borrower. You may not even have to gather traditional income documents with our Non-QM loans, entrepreneurs like you can quality in a multitude of ways.
- Loans up to $4M
- Min FICO credit score of 620
- No mortgage insurance required
- Available on primary and secondary homes, investment purchases, and refinances
- Use Bank Statements, 1099's or Debt Servicing Ratio as an alternative source for income
- Programs also available for Foreign Nationals and ITIN borrowers
Who is eligible for a Non-QM Loan?
Non-QM loans are particularly suitable for borrowers who do not meet the underwriting guidelines set forth by Fannie Mae and Freddie Mac. These types of loans are designed for those who may have difficulty securing a traditional mortgage loan due to factors such as poor credit, income inconsistencies, or a higher debt-to-income ratio. The eligibility for this varies based on the specific requirements of the lender.
What are the benefits of a Non-QM Loan?
Non-QM loans offer many benefits to borrowers who may not qualify for traditional mortgage loans. Non-QM loans often offer more favorable terms compared to other loans that fall outside traditional guidelines. Borrowers may be able to secure a lower interest rate or pay a lower down payment, making homeownership a more achievable goal. This program also offers a viable solution for self-employed individuals whose income fluctuates month to month.
What are the requirements for obtaining a Non-QM Loan?
Non-QM loans vary based on the individual requirements of the lender, but there are certain factors that are common across most non-qualified mortgage issuance. Borrowers will need to provide documentation verifying their income, employment history, and credit score. Non-QM loans also often carry higher interest rates and fees than traditional mortgage loans, as they are considered riskier by lenders.
Borrowers should also expect to go through a more thorough underwriting process, as lenders will want to be sure that they can afford to repay the loan.
It is also essential to note that Non-QM loans will require a significant down payment when it comes to financing the loan. While the exact percentage may vary, borrowers should expect to pay up to 20% of the home's purchase price as a down payment.
Contact Timothy Palm Mortgage today to learn if a Non-QM Loan is right for you!