Non QM Investor Loans: A Valuable Tool for Real Estate Investors
Updated: Mar 22
Navigating the realm of real estate investment often requires a deep understanding of diverse financing options, particularly the role of Non QM Investor Loans. These loans emerge as pivotal alternatives for investors whose needs are not met by traditional financing methods.
At Bennett Capital Partners, a leading mortgage brokerage firm based in Miami and serving all of Florida, we specialize in offering insights and assistance on Non QM Investor Loans. Our expertise is tailored to help you leverage these loans to their fullest potential, ensuring your investment strategies are not just visionary but also viable and successful.
Join us as we explore the intricacies of Non QM Mortgages and how they can be a game-changer in your real estate investment journey.
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What Are Non-QM Investor Loans?
Non-QM investor loans are loans that do not meet the criteria for traditional mortgages or government-backed loans like FHA, VA, or USDA loans. They are designed for borrowers who may not qualify for traditional financing due to factors like credit score, income, or employment history. Non-QM investor loans are offered by private lenders and are typically based on the value of the property being purchased rather than the borrower's creditworthiness.
Key Differences Between Conventional/Government Loans and Non-QM Loans:
Credit Score Requirements:
✔ Conventional/Government Loans: Typically require a minimum FICO score of 620-640.
✔ Non-QM Loans: More lenient, accepting FICO scores as low as 500.
Recent Credit Events:
✔ Conventional/Government Loans: May require a waiting period of several years after foreclosure or bankruptcy.
✔ Non-QM Loans: May approve borrowers as soon as 1 day after foreclosure or bankruptcy.
Income Verification:
✔ Conventional/Government Loans: Require traditional income documentation, such as W-2 forms and pay stubs.
✔ Non-QM Loans: Allow alternative income verification methods, such as profit & loss statements, bank statements, asset-based lending, or one-year tax returns.
Property Types:
✔ Conventional/Government Loans: Limited to warrantable condos and standard property types that meet strict guidelines.
✔ Non-QM Loans: Can finance non-warrantable condos, unique properties, and properties that fall outside conventional or government property standards.
Loan Flexibility:
✔ Conventional/Government Loans: Strict underwriting guidelines and limited loan product options. Fannie Mae and Freddie Mac loans follow conventional guidelines and FHA, VA, USDA mortgages follow Government loans guidelines.
✔ Non-QM Loans: Offer more flexibility in loan terms, down payment requirements, and repayment structures, income verification methods, such as interest-only or balloon payments. Flexible credit, including recent credit events such as purchases or refinancing after bankruptcy, foreclosure, and short sales.
To learn more about the non-qm requirements. You can visit our blog post here
Why Are Non-QM Investor Loans a Valuable Tool for Real Estate Investors?
Non-QM investor loans can provide several benefits to real estate investors:
Access to Financing
Non-QM investor loans offer financing options for real estate investors who may not qualify for traditional mortgages or government-backed loans. This allows investors to purchase properties that they might not otherwise be able to finance.
Speed
Non QM Mortgages can often be processed and approved more quickly than traditional mortgages, allowing investors to move quickly on investment opportunities without tax returns, paystubs, or W2's in most cases.
Flexibility
Non-QM loans offer more flexibility in underwriting standards than traditional mortgages, allowing investors to tailor the loan to their specific needs.
Opportunity for Higher Returns
Real estate investors can use non-QM investor loans to purchase distressed properties, fix them up, and sell them for a profit. The higher interest rates and fees associated with non-QM loans can be offset by the potential for higher returns on investment.
Why Non-QM Loans May Be Better for Certain Borrowers:
➡️ Lower credit scores: Non-QM loans cater to borrowers with less-than-perfect credit who may not qualify for conventional or government loans due to their credit history.
➡️ Recent credit events: Borrowers who have recently experienced a foreclosure or bankruptcy can benefit from the shorter waiting period associated with non-QM loans.
➡️ Alternative income documentation: Self-employed or non-traditional income earners can take advantage of the alternative income verification methods provided by non-QM loans.
➡️ Unique property types: Investors looking to finance non-warrantable condos, unique properties, or properties outside the conventional or government property standards can access funding through non-QM loans.
➡️ Loan flexibility: Borrowers who require more flexible loan terms or repayment structures can find a solution in non-QM loans.
FAQs about Non-QM Investor Loans
What are the requirements for non-QM investor loans?
Non-QM investor loans typically require a higher down payment, a good credit score, and a reliable source of income.
What types of properties are eligible for non-QM investor loans?
Non-QM investor loans can be used to finance a variety of properties, including single-family homes, multi-unit properties, and commercial properties.
How long does it take to get approved for a non-QM investor loan?
A: The approval process for non-QM investor loans can vary depending on the lender, but it typically takes less time than a traditional mortgage.
Conclusion
Non-QM investor loans offer real estate investors an alternative financing option that can provide access to funding, speed, flexibility, and the potential for higher returns. At Bennett Capital Partners, we understand that every real estate investment is unique, and we are here to help you find the right financing options to meet your needs. If you're interested in learning more about non-QM investor loans or other mortgage options, please contact us at 1-305-407-0747 or or visit our website here
Philip is the owner and Licensed Mortgage Broker at Bennett Capital Partners. He earned his degree in Accounting and Finance from Binghamton University and holds a Master's Degree in Finance from NOVA Southeastern University. With more than 20 years of experience, Philip has been a leader in the mortgage industry. He has personally originated over $2 billion in residential and commercial mortgages.
Learn more about Philip Bennett's background and experience on our Founder's page. Whether you're a first-time homebuyer or a seasoned real estate investor, our team is here to help you achieve your real estate goals. Don't wait any longer, contact us today and let us help you find the right mortgage for your needs.
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