Good news. Common sense is starting to come back into the loan the market.
This is going to really help the average home buyer of today who is 34 years old and has an average credit score of 654.
Non-QM (Qualified Mortgages) are expected to double this year.
It has been difficult for investors and self-employed borrowers to obtain a real estate loan since the market crashed about seven years ago. Good people cannot get a good loan.
Due to the requirements of the secondary market or what is often referred to as “Fanny Mae/Freddie Mac,” their market guidelines have set the rules for lending that many people cannot meet. Borrowers who cannot meet the Fannie/Freddie benchmarks must pay “hard money” rates that can be exorbitant.
With 50% of the American population having a credit score that is less than 680 it adds thousands to the cost or sometimes prevents them from qualifying for a home loan.
In general, this is what it will take to get a decent NON-QM loan:
- Have some skin in the game. You will need at least 10% down
- You must document your ability to pay back the loan as agreed
Credit must be reasonable, with evidence that you pay your bills now on time.