Non QM Loan Maricopa County Arizona

Non-QM Loan in Maricopa County, Arizona: What You Need to Know

If you're looking for a mortgage loan in Maricopa County, Arizona but don't meet the strict requirements of traditional lenders, a non-qualified mortgage (non-QM) may be the solution. Non-QM loans are designed for borrowers who have unique financial situations that make it difficult to qualify for conventional mortgages.

What is a Non-QM Loan?

A non-qualified mortgage loan is any type of home financing that doesn't conform to the standards set by Fannie Mae and Freddie Mac. These government-sponsored entities purchase most of the mortgages issued by banks and other lenders in the United States. As such, they set strict guidelines on borrower eligibility criteria and property types.

Non-QM loans offer more flexibility than traditional mortgages because they aren't subject to these guidelines. Instead, lenders use their own underwriting criteria when evaluating applicants' creditworthiness.

Who Qualifies for a Non-QM Loan?

Non-qualified mortgage loans are ideal for borrowers who:

1. Have low credit scores or no credit history
2. Are self-employed or have irregular income streams
3. Have high debt-to-income ratios (DTI)
4. Want to finance investment properties or second homes
5. Need jumbo-sized loans above $548,250

However, just because there are fewer restrictions with non-QMs doesn't mean everyone can get approved easily; lenders still require proof of income and assets as well as good payment histories on existing debts.

Types of Non-QM Loans Available in Maricopa County

There are several types of non-qualified mortgage loans available in Maricopa County:

1) Bank Statement Loans This type of loan allows self-employed individuals or those with irregular incomes to use bank statements instead of tax returns as proof of income.
2) Interest-only Loans With an interest-only loan, borrowers only pay the interest on their mortgage for a set period of time, usually 5-10 years. After that, they start paying principal and interest.
3) Asset-based Loans This type of loan is based on the borrower's assets rather than income or credit score. Lenders will evaluate your net worth and use it as collateral to secure the loan.
4) Non-warrantable Condos These are condos that don't meet Fannie Mae or Freddie Mac guidelines because of issues such as high investor concentration or pending litigation.

Benefits of Non-QM Loans

Non-qualified mortgage loans offer several benefits over traditional mortgages:

1) More flexible underwriting criteria
2) No maximum DTI ratio limits
3) Ability to finance investment properties and second homes
4) Larger loan amounts available for jumbo-sized loans above $548,250

However, non-QMs also come with higher interest rates compared to conventional mortgages due to increased risk factors associated with these types of loans.

How to Apply for a Non-QM Loan in Maricopa County

To apply for a non-qualified mortgage loan in Maricopa County, you'll need to find a lender who specializes in this type of financing. You can search online or ask your real estate agent for recommendations.

Once you've found a lender, you'll need to provide documentation such as bank statements, tax returns (if applicable), proof of employment/income/assets and other financial information required by the lender. The process may take longer than traditional mortgages since there is more paperwork involved but once approved borrowers can enjoy greater flexibility when it comes to buying their dream home.

Conclusion

If you're looking for alternative financing options in Maricopa County Arizona but don't qualify for traditional mortgages due to unique financial situations like being self-employed or having irregular income streams then consider applying for non-qualified mortgage loans instead. With more flexible underwriting criteria and larger loan amounts available at higher interest rates, non-QMs can be a great option for those who need it.