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Non-Qualifying (Non-QM) Loans

I need a home loan but don’t meet the requirements to be considered a qualified mortgage

Non-Qualifying (Non-QM) Loans

QM loans are mortgages that do not meet the standards of Qualified Mortgages (QM) set by the Consumer Financial Protection Bureau (CFPB). These standards, put in place as part of the Dodd-Frank Act, require lenders to ensure that borrowers have the ability to repay (ATR) their loans.

To make sure you understand what a non-qualifying mortgage is, let's review the parameters of a qualified mortgage:

  • The loan term must be 30 years or less.
  • The total points and fees charged must be 3% or less of the loan amount.
  • The lender must verify and document the income, assets, and credit in qualifying the borrower.
  • The loan cannot have negative amortization, be interest-only, or have a balloon payment.
  • The borrower must have a debt-to-income (DTI) ratio of 43 percent or less unless approval is granted by the agency's Automated Underwriting System (AUS).

If you fall outside of these parameters, a non-QM mortgage may be a good fit for you. Click here to review additional details.