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What’s the Difference between a QM and Non-QM Loan Program for Real Estate Investors?

Updated: Feb 9

Great question! QM stands for a qualified mortgage. Qualified mortgages tend to be traditional government-backed loans and conventional loans (basically non-government backed traditional loans).

QM Loans are usually processed through a bank on an owner occupied property whereas NON-QM Loans are a more desirable solution for real estate investors on an investment property.

NON-QM stands for a NON-qualified Mortgage. Non-QM loans are typically portfolio loans for private investors that do not conform to the strict government or conventional mortgage guidelines.

Why Should Real Estate Investors choose NON-QM Loans Over Traditional or Conventional Loans?

Mortgage lenders who utilize QM loans must first qualify a mortgage borrower’s income, liabilities, and monthly debt payments to determine whether the borrower can successfully pay back the loan in the future. To successfully qualify for a QM loan, real estate investors must fit the strict requirements set by the Consumer Financial Protection Bureau. This approval process requires borrowers to submit extensive documentation concerning their credit history, income, assets, and monthly debt payments, which usually takes well over a month to complete.

If you have an investment property that needs a quick turnaround without stringent guidelines, NON-QM loans may be better for you -- NON-QM loans do not need to abide by these strict guidelines! This means that NON-QM lenders like Stratton Equities, can provide faster service and approval to more types of real estate investment opportunities.

NON-QM lenders understand that life can happen and that to a traditional lender (like a bank) certain real investors may not present like a qualified candidate for a loan. This restriction could be due to your employment status, income, credit history, and liquid asset requirements - however with a non-qualified mortgage, private lenders focus on; high credit score, investing experience, and liquid assets.

Unlike conventional investment property loans that max out at 70% LTV, a NON-QM Mortgage Program maxes at 85% LTV and with no PMI. This allows the borrower to put less money down on their purchase.

As a result, NON-QM loans’ lax restrictions make them ideal for these types of real estate investors:

  • Self-Employed Investors: Especially in light of the unprecedented year, with COVID-19, we completely understand how difficult it is to find steady income. Fortunately, we here at Stratton Equities specialize in NON-QM Loans and asset based loans. This means that you do not need to show us your income! We base our loans on the value of the property itself or the borrower’s credit score and liquid assets.

  • Foreign Nationals: Government backed loans typically require proof of a US Social Security number or a W2 (which is a US tax form). Because NON-QM loans don’t have such requirements, they are ideal for foreign nationals who are in the States on a visa and are looking to invest.

Why Should Real Estate Investors Work with Stratton Equities?

Stratton Equities is the leading hard money and NON-QM mortgage lender for real estate investors in the United States. With the largest library of NON-QM mortgage loan programs under one roof, we here at Stratton Equities pride ourselves on tailoring the perfect mortgage loan options for each individual client’s needs nationwide.

We also understand how important your time is - as opposed to banks who broker your loan application out to other banks to waste time, our loan officers can get back to you with your pre-approval for a loan within 24 hours.

As a direct hard money lender, Stratton Equities and our team of expert loan officers will help guide you through our expedited loan approval process, finishing weeks before our traditional competitors. No Junk Fees! No Upfront Fees! No Tax Returns!

At Stratton Equities, we work directly with real estate investors and help them fulfill their real estate entrepreneurial goals. Whether you’re an experienced borrower or a first time investor, we understand how daunting and complicated it must be to try to enter this competitive field. But don’t worry! All we really ask of our clients is determination and commitment to their projects. No expertise needed. Welcome to your one-stop shop for all your real estate investment loan needs!

If you’d like to learn more about our library of mortgage loan programs, click here to explore our website. Have a property in mind and would like to get pre-qualified? Apply Now and we will get back to you within 24 hours.

Contact Stratton Equities, the leading hard money and NON-QM lender, to speak with one of our talented and experienced loan officers at 800-962-6613, email us, or apply for loan pre-qualification today!

QM Loan Program and Non-QM Loan Program


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