Updated: May 29, 2019
If the bank declined your loan for one of these reasons, there is hope!
A 2-year average of the income reported on your tax returns does not verify enough income to qualify
You had a recent negative event like a foreclosure, short sale or bankruptcy
You have significant assets, but do not have enough taxable income to qualify
Your DTI is too high to qualify by standard lender guidelines
Your credit score is too low to qualify for the loan you want
You want a loan that is greater than the conforming limit with less than 20% down payment
You have more than 4 to 10 financed properties
You are a Foreign National and do not have U.S. credit and/or income reported in the U.S.
You want to buy a residential investment property and use only the rental income to qualify, because a 2-year history of your personal income will not allow you to qualify
Your condominium is non-warrantable
You were 30-days late, or more, on a mortgage loan in the last 12 to 24 months
You need cash out and the LTV is higher than standard lenders allow
You qualify if the loan term is 40-years instead of 30-years, but your lender doesn’t offer 40-year term loans
You have insufficient reserves to qualify for the loan you want
The property needs significant repairs, so a standard lender will not finance it
The title is held in an LLC or blind trust
All these situations are covered by “Non-QM” lenders. “QM” stands for Qualified Mortgage. A mortgage is qualified by U.S. Government standards if it falls within their box of loans that are stable and the borrower can repay. If you read the definition on the CFPB website, you may agree with me that it is a fair guideline.
They want lenders to ensure the borrower has the ability to repay the loan (Gee, what a concept! I wish that were the standard before 2007.) They dislike risky features like interest only, balloon payments, negative amortization and excessive fees.
Non-QM lenders also follow the ATR rules; that is, they determine that the borrower has the ability to repay the loan. But they do not fit the Appendix Q guidelines.
Large banks like Chase, Wells Fargo, Bank of America and others will only use tax returns to verify income, because Appendix Q requires it. They will not verify income with bank statements.
They will rarely approve loans if one of the issues listed above exists. Enter the Non-QM lender. I place my client’s loans with Priority Financial Network. In my experience, they have the largest selection of Non-QM lenders of any mortgage company. They also offer a huge selection of standard lenders.
Whether your loan is inside the standard lender box, or outside the box, I can find a loan program that suits you. If you want to see your options, call or email me 877-728-2008 Holly@HollyGustlin.com