The housing market is booming and more and more people are looking to buy a home, but they may not have the traditional qualifications to qualify for a conventional loan. Non-QM bank statement loans are becoming a popular option for borrowers who don’t have the conventional qualifications, but have the financial stability to make a loan payment. These loans have become increasingly popular due to their flexibility, ease of use, and fast approval process.
What Are Non-QM Bank Statement Loans?
Non-QM bank statement loans are a type of loan that does not require a borrower to provide traditional income information. Instead, the borrower can provide bank statements to prove they have the financial means to make the loan payments. These loans are typically used by self-employed borrowers, or those who receive income from other sources, such as investments or rental income.
What Qualifications Are Needed For Non-QM Bank Statement Loans?
The qualifications for non-QM bank statement loans vary from lender to lender, but generally, the borrower must have a minimum credit score of 620 or higher, have a maximum debt-to-income ratio of 45%, and have a minimum of 12 months of bank statements. Additionally, the borrower must have an acceptable source of funds for the down payment and closing costs.
What Are The Benefits Of Non-QM Bank Statement Loans?
Non-QM bank statement loans offer a number of benefits to borrowers. First, they are easy to qualify for since the income requirements are less strict. Second, the application process is often faster since the borrower only needs to provide bank statements and not other documents. Third, the interest rates are often lower than those of traditional loan products. Finally, non-QM loans are often easier to get approved for since the borrower has more flexibility in terms of income and down payment.
What Are The Drawbacks Of Non-QM Bank Statement Loans?
Although non-QM bank statement loans offer many benefits, they do have some drawbacks. First, the interest rates are typically higher than those of traditional loan products. Second, the borrower must have a minimum of 12 months of bank statements, which can be difficult to obtain if the borrower is self-employed. Third, the loan process can take longer since the borrower must provide additional documentation. Finally, the borrower may be required to pay a larger down payment or higher closing costs due to the higher interest rates.
How To Choose The Right Non-QM Bank Statement Loan?
When considering a non-QM bank statement loan, it is important to compare lenders to find the best terms. Make sure to compare interest rates, fees, down payment requirements, and other loan terms to ensure you are getting the best deal possible. Additionally, make sure to research the lender’s reputation and customer service record to ensure you are working with a reputable lender.
Non-QM bank statement loans are a great option for those who don’t have the traditional qualifications to qualify for a conventional loan. These loans offer a number of benefits, including a faster application process, lower interest rates, and more flexibility in terms of income and down payments. However, it is important to compare lenders and research the lender’s reputation before applying for a loan.