The client also has to know the requirements of this kind of credit, and they also have to realize why it is better than the QM loans in cases of inadequate finances.
For a client to find the right loan that does not meet the standards set by the government, one has to consider the following:
- Why does the client need this type of lend? Are they in a bad financial situation?
- How urgent is the loan needed and how long is the waiting period?
- The requirements that qualify the customer for the loan
Which is the right non-QM loan for you?
The right non-QM loan for a client is one that:
- Does not have excessive upfront and fees. The upfront fee is the fee that is charged to the borrower by a lender. This fee should not go beyond 3% of the total amount that is borrowed by the customer.
- Has no loan features that are unfavorable: Loans that are not only for interest, loans with no negative amortization and no balloon loans.
- The limits on debt-to-income ratios. A loan that does not require DTI ratio of more than 43%