Fixed Rate Second Mortgage Loan Programs
Non-QM (Non-Qualified Mortgage) fixed rate second mortgage loan programs are alternative lending options designed for borrowers who may not meet the strict criteria of traditional mortgage loans. Fixed rate second mortgages allow borrowers to get cash out of their home without refinancing a low rate first mortgage, resulting in a lower blended overall rate.
Fixed Rate Second Mortgage Loan Highlights
- Definition of Non-QM Loans: Non-QM loans do not adhere to the qualified mortgage guidelines established by the Consumer Financial Protection Bureau (CFPB) under the Dodd-Frank Act. As a result, they offer more flexibility in terms of borrower qualification criteria.
- Purpose of Second Mortgage Loans: A second mortgage loan is a loan taken out against the equity in a property that already has an existing mortgage. Borrowers may choose a second mortgage to access additional funds for various purposes such as home improvements, debt consolidation, or other financial needs.
- Property Types Allowed: Non-QM fixed rate second mortgage loan programs typically allow various property types, including primary residences, second homes, and investment properties. However, the specific property types permitted can vary among lenders, so it's essential to consult with individual lenders to determine their eligibility requirements.
- Maximum Loan-to-Value (LTV): LTV refers to the loan amount as a percentage of the property's appraised value. Non-QM second mortgage loan programs often have maximum LTV ratios ranging from 75% to 90%. This means that borrowers can potentially access up to the specified percentage of their property's appraised value through a second mortgage loan. However, the exact LTV allowed can vary depending on the lender and the borrower's financial profile.
- Qualification Criteria: Non-QM loans typically consider a borrower's overall financial picture, including credit history, income, and assets. While the specific qualification requirements can differ among lenders, these loans may be more accommodating to borrowers with lower credit scores, self-employed individuals, or those with unique financial circumstances.
- Fixed Interest Rates: Non-QM fixed rate second mortgage loans come with a fixed interest rate, meaning that the rate remains constant throughout the loan term. This provides borrowers with predictability and stability in their monthly mortgage payments.
- Documentation and Underwriting: Non-QM loans may require more extensive documentation and a thorough underwriting process compared to traditional mortgage loans. Borrowers should be prepared to provide comprehensive financial documentation, including bank statements, tax returns, and other relevant paperwork, to support their loan application.
Non-QM Fixed Rate Second Mortgage Loan Program Terms:
- Up to 90% LTV Primary Homes
- Up to 85% LTV Investment Property
- Eligible for Investors & Self Employed
- 660 Min FICO
- 1 Year Full Doc
- 1 Year Alt Doc with Bank Statements
- Fixed Rate for 10/15/20/30 Years
- Interest Only Available
- Up to $1M Loan Amount
- Up to 50% DTI