
Due to diverse financial profiles, many real estate buyers and owners find securing traditional financing out of reach. This challenge opens up a significant opportunity for these investors to lean on Non-QM loans.
By adding Non-QM loans into your loan offering toolkit, you can attract more clients and excel in a competitive market.
Key Advantages of Non-QM Loans
Non-QM loans offer several benefits that make them appealing to a wide range of borrowers. Here are some key advantages:
Higher Loan Amounts: Non-QM loans often come with higher loan limits than traditional mortgages. This is particularly beneficial for clients looking to finance high-end homes. For instance, LendSure’s Jumbo loan program offers amounts up to $3 million, making it easier for borrowers to purchase luxury properties without the stringent requirements of a conforming mortgage.
Flexibility in Income Documentation: One of the biggest obstacles for many borrowers is providing traditional income documentation. Non-QM loans eliminate this barrier by offering various verification methods. This flexibility is particularly beneficial for:
- Self-employed people who may not have regular pay stubs but can demonstrate their earnings through business or personal bank statements.
- Borrowers with significant assets but irregular income streams, who can leverage their assets as proof of their ability to cover mortgage payments.
- Real estate investors who can use rental income to qualify, making it easier to finance additional properties.
- Foreign nationals who may not have U.S. credit history but can provide alternative documentation to demonstrate financial stability.
- Property flippers who need quick financing options and can use projected income from property sales.
- And more!
Alternative Property Types: These loans can be used for purchasing non-warrantable condos, vacation condotel properties, and other non-traditional residences that typically don’t meet the criteria for conforming financing. This makes them a valuable option for those who want to diversify their real estate portfolios.
Types of Verification Methods for Non-QM Loans
Non-QM loans offer several income documentation options that make the process smoother for your clients. Here are some of LendSure’s popular methods:
Bank Statement Program
Targeted at gig workers, freelancers, retirees, and small business owners who can show their earnings through bank statements. LendSure’s Bank Statement program, allows the use of both business and personal bank statements, W-2 with Bank Statements combinations, and P&L statements not required, making it easier for borrowers to qualify.
Asset Depletion/Asset Qualifier Program
This program is perfect for borrowers with significant assets but irregular income streams. By using bank statements to show cash balances, brokerage statements reflecting stock and bond holdings, or retirement account statements, borrowers can leverage existing assets as proof of ability to cover mortgage payments.
For real estate investors, this program allows borrowers to qualify for funding based on the cash flow generated by the rental property rather than providing income docs. The DSCR is calculated by dividing the property’s gross rental income by the total debt service (monthly mortgage payments). This program benefits investors looking to finance additional rental properties without the need for traditional income documentation.
Catered to non-U.S. citizens, this program allows clients to take advantage of 1-4 unit investment properties. Borrowers can qualify using income from their foreign country or investor cash flow (DSCR). No tax returns are required, and foreign credit reports or credit reference letters are acceptable. The program accepts various visa types, including B1, B2, F1, H2, H3, I, J1, O2, P1, P2, TN NAFTA, and Laser Visa, as well as a no visa option. Find out more here.
Practical Tips for Expanding Your Non-QM Loan Client Base
By offering Non-QM loans, you can significantly broaden your client base. Here’s how:
Market Yourself: Run targeted ads on Google, LinkedIn, Facebook and Instagram to reach potential clients. Share informative organic content about the benefits of Non-QM loans on your social media channels. Keep your website updated with client testimonials and success stories.
Understand Client Needs and Offer Personalized Solutions: Get to know your clients’ financial situations, especially those who are self-employed or have irregular income. This personalized service along with regular follow-ups and ongoing support will help you build long-term client relationships and gain referrals.
Network For Referrals: Expand your network by attending real estate investment clubs, real estate meetup groups, Non-QM loan conferences and seminars, online forums and social media groups, real estate auctions and networking events, and local real estate networking events. These places are excellent for building connections and finding potential referrals and partners.
Pro Tip! To improve your Non-QM offerings and attract more clients, consider utilizing our Marketing Resources Toolkit. This kit provides valuable marketing materials, tools, and strategies to help you promote Non-QM loans effectively. Sign up here.
The LendSure Way
It’s simple. We make loans that make sense. We’re not in-the-box lenders. Of course, there are numbers ratios, and data to consider, but we know that behind every file, there’s an individual with a unique circumstance seeking a loan. We work hard to offer our common-sense take on lending to borrowers seeking funding for the home of their dreams, another addition to their investment property portfolio, or refinancing of a currently-owned property.
Are you ready to benefit from a common-sense approach to lending? Contact us today to learn more about non-QM loans and how partnering with LendSure Mortgage Corp. can help grow your bottom line.