"The non-qualified mortgage market has experienced significant growth since its introduction nearly a decade ago. 10 years in, credit ratings agencies regularly release performance metrics for investors, which provide remarkable insight into this extremely versatile asset class. In a recent default study on non-QM performance over the years, for example, KBRA analysts note that non-QM loans faced tremendous macroeconomic uncertainties, from the recent era of high interest rates to the COVID-19 lockdowns, and yet continue to perform above and beyond expectations."
"Generally speaking, we're observing a diverse group of individuals and businesses seeking financing solutions that traditional mortgage products may not accommodate. This includes self-employed individuals with fluctuating incomes, real estate investors with multiple properties, and those who may have experienced a past credit event but have since re-established financial stability. The appeal of Non-QM loans stems from their inherent flexibility. Unlike Qualified Mortgages, which adhere to strict DTI (debt-to-income) ratios and income verification methods, Non-QM loans offer alternative documentation options."
The non-qualified mortgage market has grown substantially over the past decade and regularly produces performance metrics from credit ratings agencies. Non-QM loans have shown resilience amid macroeconomic challenges such as high interest rates and COVID-19 lockdowns, often outperforming expectations. Borrowers include self-employed individuals with variable incomes, real estate investors with multiple properties, and borrowers recovering from past credit events who now show financial stability. Non-QM underwriting emphasizes flexibility through alternative documentation like bank-statement income verification and DSCR underwriting that evaluates rental income. Lenders assess risk using a broader, more holistic view of income sources and property cash flows.
Read at www.housingwire.com
Unable to calculate read time
Collection
[
|
...
]