If your client does not meet the necessary qualifications for a traditional loan due to a lower credit score, tax returns that do not reflect an accurate representation of their income, or who may have a history of bankruptcy or foreclosure or cannot otherwise get a traditional loan may benefit from a Leverage or Non-QM (Non-Qualified Mortgage) Loan.

Non-Qualified Mortgage (Non-QM) loans are the loans that borrowers seek when they cannot qualify for other loans. These mortgages are for non-traditional borrowers such as real estate investors, entrepreneurs, artists, and musicians. Clients who prefer interest-only payments or who get paid in lump sums can also benefit from Non-QM loans.  

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How Does a Non-QM Loan Work?

Non-QM loans are sometimes called leverage loans because they are based on collateral. As they are based on collateral, they have better underwriting flexibility because they are not required to meet the Consumer Financial Protection Bureau’s (CFPB) or federal government qualifications. Other benefits of Non-QM loans are:

  • A credit score as low as 620 is allowed 
  • No personal income calculations are required
  • Job history is (sometimes) not required 
  • The required down payment can be as low as 5%
  • In some cases, no reserves are required

Non-QM loans are favorable to homeowners and real estate investors alike because sometimes they are the only way to make timely purchases or to make some investment opportunities possible. Sometimes the risks may outweigh the benefits in this type of loan, but if that perfect real estate opportunity comes along, it’s good to know that a Non-QM loan is available to grab it! 

Who Would Benefit From A Leverage/Non-QM Loan?

Your client may benefit from a Non-QM loan if they:

  • Are self-employed
  • Are a real estate investor
  • Are a retiree looking at purchasing a vacation home
  • Are an owner of a small to midsize business
  • Are looking for interest-only payments
  • Have experienced bankruptcy, foreclosure, or a short sale

If your client falls into one of these categories, please contact one of our lending professionals to find out if they qualify for a Leverage/Non-QM loan.

Bluepoint Mortgage Can Help!

Contact us at Bluepoint Mortgage today! For many real estate investors and potential homeowners, Non-QM Loans may be a viable option. Let us determine if your client has the qualifications to secure the loan to make that real estate purchase they have been waiting for!