When the  Great Recession of 2008 hit the world, millions of Americans lost their homes. Even the housing market that is always known to experience an increase against all odds collapsed. The National economy was left in shambles. Although the blame game started, but in the end, most financial experts agreed to one major cause, subprime mortgages. These loans/mortgages’ types are quite dangerous because they are obscure as a helping loan source to low-income Americans. In addition, these types of loans are very hard to manage for both the lender and the homeowner. Therefore, it is best to consider a Non-QM loan when marketing for a home with less than stellar credit.

QM represents Qualified Mortgages. A Qualified Mortgage is a type of loan with defined rules for approval because they calculate the borrower’s ability to repay the debt. Most conventional and hard money lenders have to do their due diligence or make a good faith effort to decide that you must have verified the financial means and creditworthiness to afford the loan payments. This rule is tagged as an ability to repay. Therefore, if any of the above-mentioned bodies gives you a loan, they must have carried out several tests.

Sometimes people mistake Non-QM Loans as a type of Subprime Loan. This is false because, in Subprime loans, the income is usually not regarded. Instead, non-QM loans provide help to people with unconventional situations with means of borrowing money.

To read more on the difference between Subprime Loans and Non-QM Loans, click here.


About Note Servicing Center

Note Servicing Center provides professional, fully compliant loan servicing for private mortgage investors so they can avoid the aggravation of servicing their own loans and just relax and get paid.

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