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Non-Qualified
Mortgage
NONQUALIFIEDMORTGAGE.COM
NONQUALIFIEDMORTGAGE.COM LENDER HOTLINE: 888-581-5008
There are two types of mortgages:
Qualified
Non- Qualified
The difference is whether or not the government agenciesprotect the lender against any type of lawsuit against themshould a borrower become unable to afford their mortgagepayments and want to sue.
NONQUALIFIEDMORTGAGE.COM LENDER HOTLINE: 888-581-5008
What is a Non-Qualified Loan?
A “non-qualified” loan (non-QM), means thatthe borrower does not meet the “qualifiedmortgage” guidelines and poses a higherrisk in terms of default.
NONQUALIFIEDMORTGAGE.COM LENDER HOTLINE: 888-581-5008
What is a Qualified Mortgage?
A “qualified” mortgage (QM) means that the borrower meetscertain requirements pertaining to his ability to afford theloan at the time of application. In this case, the lender wouldbe protected against any penalties regarding this loanshould the borrower default.
NONQUALIFIEDMORTGAGE.COM LENDER HOTLINE: 888-581-5008
Qualified Mortgage Rules
Debt ratio cannot exceed 43% no matter the type of
loan (FHA, VA, conventional)
Points and/or fees should not exceed 3% of the
loan amount
The loan cannot be interest only, have negative
amortization, or any other risky features
Verification of income is required (no stated income
or asset verification only)
Loan term must not exceed 30 years
NONQUALIFIEDMORTGAGE.COM LENDER HOTLINE: 888-581-5008
Non-Qualified Does not Mean Not Able to Pay
The Ability to Repay Rule, put into place by the Dodd-Frank Act, requires lenders to ensure that borrowers canafford the loan. This means:
Verifying income and/or assets
Verifying employment
Accurately calculating the debt to
income ratio
Evaluating credit history
NONQUALIFIEDMORTGAGE.COM LENDER HOTLINE: 888-581-5008
The non-qualified loan is a great option forborrowers in unique circumstances including:
Self-employed for less than 2 years
Self-employed and not showing a great
amount of income on tax returns
High debt ratio yet plenty of reserves to
make up for the debt ratio
Blemished credit due to unforeseen
circumstances during the downfall of the
economy
NONQUALIFIEDMORTGAGE.COM LENDER HOTLINE: 888-581-5008
T O L E A R N M O R ENONQUALIFIEDMORTGAGE.COMLENDER HOTLINE: 888-581-5008
C L I C K H E R E
NONQUALIFIEDMORTGAGE.COM LENDER HOTLINE: 888-581-5008
Justin McHood is Americas MortgageCommentator and has been providing
Mortgage commentary for over 10 years.
INFORMATION PROVIDED BY:Justin McHood
Mortgage Commentator
NONQUALIFIEDMORTGAGE.COM LENDER HOTLINE: 888-581-5008
LEARN MORE ABOUT MORTGAGE COMMENTATOR:
MORTGAGECOMMENTATOR.COM
@MORTGAGECOM_
FACEBOOK.COM/MORTGAGECOMMENTATOR
LENDER HOTLINE: 888-581-5008
NONQUALIFIEDMORTGAGE.COM LENDER HOTLINE: 888-581-5008
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