Today’s market brings many different mortgage products. I am seeing more information on Non-Qualified mortgage products coming back into play. These are supposedly not the subprime products of the past. I will agree that there have been some overly-stringent credit requirements over the past few years, but I am not sure pulling out the stops makes much sense either. I ran across this article in The MReport on Mortgage Makeovers which caught my eye.
With non-qualified mortgage products busting open the doors to homeownership, it’s time to dispel the myth that non-Qualified Mortgages are the new subprime.
or the past few years, there has been pent-up excitement about credit expansion to make homeownership more accessible for credit-worthy consumers. It is not difficult to understand why with mortgage rates at an all-time low and no shortage of first-time buyer programs with relatively low down payment requirements. Also, the economy is more favorable than it has been in years. And yet, home sales and mortgage volumes seem overwhelmingly “blah.” What exactly is holding back the would-be homeowner?
Overly-stringent credit requirements continue to needlessly prevent millions of Americans from building wealth through homeownership. As property values continue to rise, legions of prospective borrowers remain sidelined. Many of these borrowers are qualified for loans but think they are not, so they don’t even try.
For many borrowers, the most significant challenge is to figure out a way to ease wrinkles in credit history as past foreclosures carry the most weight. There have been more than 20 million foreclosures since 2010, most of which involved more than one borrower. That means as many as 40 million Americans cannot qualify for a traditional Fannie Mae loan.
Typically, consumers must wait seven years for a past foreclosure to clear before they can qualify for conventional financing. Foreclosure volumes peaked before 2014. Since then, many people who had a foreclosure have had an opportunity to stabilize their finances and re-established their credit.
The great news is that there is an increasing number of non-Qualified Mortgage (QM) products that allow as little as 12 months since a past foreclosure or default. This new trend promises enhanced homeownership opportunities for millions of previously troubled borrowers.
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Bottom Line
Do you think this is a product that will allow you to step into, or back into homeownership? Contact us and we can assess where you are at. If you feel you are ready for the next step we will gladly provide you a list of resources that may be able to help.
