Find the Top Non QM Loans in California
Getting a mortgage is the best way to get enough money to buy a home in California, right? However, for some people, getting a home loan is a challenge. You may be self-employed, or your source of income may be non-traditional. It may also be that you have had some financial problems before.
In any case, if there is a particular circumstance, it has made it impossible for you to qualify for the FHA or CalHFA on every mortgage loan application. Fortunately, there is a California mortgage alternative that can help you buy a home: non QM loans in California. You should learn more about this option, and how it differs from traditional or qualified loans, so you know why this is the right choice for you.
Comparing Non-QM vs. QM Loans
Qualification
QM, Qualified, or traditional loans are those that are backed by federal agencies such as the FHA, USDA, VA, state agencies such as CalHFA, or government-backed foundations such as Fanny Mae or Freddie Mac. To access these programs you must first qualify your income, liabilities, debts, assets, and other requirements from each agency and the Consumer Financial Protection Bureau. Non-QM loans, on the other hand, do not need to meet all of these strict regulations, so you will have a quick and smooth turnaround.
Requirements
To be approved for a QM mortgage and refinance option, you must meet several financial requirements including a good credit score, income, credit history, employment stability, liquid assets, repayment reputation, and no previous financial problems like bankruptcies. In contrast, Non-QM credit approval is much more lax and straightforward. Non-QM best mortgage lenders take into account far fewer factors, such as credit score, investment experience, and liquid assets.
Type of Borrower
Most qualified mortgage lenders cater to a particular type of people, such as having Social Security, a W2, stable employment, and citizenship. Non-QM loans, on the other hand, are available to anyone who can afford them and who meets the lender’s minimum requirements, which vary depending on where you apply.
Loan-to-Value Ratio
In the case of investment properties, conventional loans only reach 70% of the loan-to-value ratio of the property. In contrast, with a non-qualified loan, you will be able to access up to 85% of the loan-to-value ratio, and no PMI. This will allow you to achieve the purchase by putting less money down.
Interest Rates & Downpayments
Conventional California mortgage and refinance rates hover around 20%. With qualified programs from agencies like the FHA or CalHFA you can get your home with less money down, 3% or even zero depending on the program you choose. Also, you will enjoy lower interest rates than traditional banking. In the case of Non-QM loans, the down payment will depend on your lender and can range from 10%-30%. The interest rates are usually slightly higher, but keep in mind that it is a great opportunity to get a loan and a house that you could not get with sponsored programs. Besides, you can later refinance your mortgage, and change your payment terms for the better.
Trust Dimitrije Isakovic Mortgage Group
If you are looking for the best non QM loans in California, you are in the right place. We are the leading mortgage broker in California, with over 25 years of experience helping Californians get the homes of their dreams. Contact us and schedule an appointment for a personal consultation.