hash-mark Examples of Non-QM Loans Bank Statement Loansīank statement loans only require a bank statement for approval. But they can also be risky because they don’t have to adhere to the usual standards recommended by the federal government to protect lenders. Non-QM loans can be an alternative for those who would otherwise not qualify for a loan. But a non-QMI loan may also have terms deemed too risky for the GSEs, such as negative amortization or balloon payments. Non-QM loans don’t meet the standards to be classified as QM loans, usually because the borrower can’t verify their income, they have a low credit score, or they have high debt. Following the 2008 Housing Crisis, the Dodd-Frank Bill created what is known as a qualified mortgage (QM) which set the parameters for what the GSEs could and could not insure. Usually, a borrower will get a non-QM loan because they do not meet a traditional loan’s credit and income requirements. Non-QM loans are mortgage loans that are not backed by a department of the federal government or by the government-sponsored entities Fannie Mae and Freddie Mac. Here is a look at non-QM loans and who they benefit. Non-QM loans offer laxer requirements but may feature higher interest rates and desirable terms than conventional mortgages. If you don’t meet the qualifications of a traditional mortgage, there is something called a non-QM Loan that you may consider.
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