One reason some of our clients have delayed in applying for a non-QM loan like a bank statement mortgage or cash flow investment loan is the interest rates. In many cases, the mortgage interest rate for a non-QM loan will be a bit above what you would get with a conventional mortgage. If concerns about the interest rate are holding you back from applying for a mortgage, here’s what you might want to consider.
Competitive Terms Tailored to Fit Your Needs
Unlike conventional loans, which adhere to rigid qualification requirements, non-QM loans provide solutions tailored to your financial situation. While the interest rate may be slightly higher, these loans allow for:
- Alternative income verification (ideal for self-employed borrowers and entrepreneurs)
- Higher debt-to-income (DTI) ratio allowances
- Financing options for unique property types or investment homes
- Credit flexibility for borrowers with non-traditional credit profiles
With a personalized lending strategy, we work to find the most competitive rate available while ensuring the loan meets your long-term financial goals. In other words, the slightly higher interest rate is usually worth the trade-off for the other terms that support your goals.
The Value of Flexibility
It’s easy to focus solely on interest rates, but the real value of a mortgage lies in its ability to help you achieve your financial objectives. A non-QM loan can provide things no conventional mortgage can, like:
- Faster loan approvals for those who may not fit standard underwriting criteria.
- Higher loan amounts for borrowers with strong assets but non-traditional income sources.
- Expanded refinancing options for homeowners looking to leverage their equity.
The interest rate you get is simply one piece of the puzzle. Finding the right loan for you means taking a multi-faceted approach to identify financing that uniquely suits your income, your goals, and your life. Rather than being boxed into a one-size-fits-all loan, non-QM borrowers enjoy lending solutions designed specifically for their needs.
Long-Term Benefits Offset Higher Interest Rates
Many non-QM borrowers use their mortgage as a strategic financial tool. The benefits of these loans offset their higher costs.
For example, non-QM loans can provide financing for investment properties, allowing you to generate rental income or build long-term equity that far outweigh what you are paying in interest. The can also be a source of bridge financing; if you need to buy a home before selling your current one, a non-QM loan can provide short-term flexibility. And remember, no mortgage is something you’re tied to forever. As your financial situation evolves, you may have the opportunity to refinance into a lower-rate loan in the future.
A Holistic Approach
Focusing solely on interest rate can be an oversimplification that limits you when you are finding the right mortgage. At the end of the day, a mortgage should be more than just an interest rate—it should be part of a larger financial strategy. A non-QM loan provides flexibility that can help you secure the home you want without rigid restrictions, structure your financing in a way that aligns with your cash flow, and take advantage of real estate opportunities that traditional loans may not allow.
Our Jackie Barikhan says, “Higher interest rates on non-QM loans are a trade-off for the flexibility and opportunities they provide. When you work with us, we are able to understand your unique needs and take a holistic approach to finding the right financing option.”
To learn more about a non-QM loan, please feel free to contact us any time. We would love to discuss what loan options best suit your specific needs. Whether a bank statement loan, a non-QM loan, or a stated income loan, we are here to help make your dreams of homeownership a reality.
