Non QM loans refer to home loans that fail to comply with the Consumer Financial Protection Bureau’s rules on Qualified Mortgage (QM). For anyone to get home financing, they need to be employed. This requirement often shut the chances of the self-employed or those with seasoned jobs from landing a dream home. Such group of people can go for non qualified mortgage loans . Being self-employed, at times may prove very difficult to convince mortgage lenders that you have a steady income. Mortgage lenders may be hesitant in giving you a mortgage loan because of the self- employment status.
Non QM loans also follow the Ability to Repay rules (ATR) even if this may sound unfair to self-employed people. With these, the credit history and income of the borrower will have to be verified. The mortgage lender will have to confirm that the borrower will be able to repay the home loan.
Benefits of non-QM loans to self-employed workers
- No Need for Extensive Paperwork
With non qualified mortgage loans, there is little paperwork needed in order to be eligible for the mortgage. Non QM loans require you to do little in order to gain the confidence of the lender.
- Verify Income Through Bank Statements
Non-qualified mortgage loans allow the self-employed individual to verify their income via bank statements. You will not be required to present paystubs or even tax forms. It is that easy!
- Longer Term of Payment
With non-QM loans, you can spread out your payment plan for up to 40 years. You do not need to worry on being pressured to pile up your payments into huge chunks within a short period. This is convenient for self-employed people since you can pay your mortgage without straining.