October 2024 Economic Update: Navigating the Shifts in the Housing and Financial Markets
The October Economic Update dives into key economic indicators like Federal Reserve interest rates, inflation, and employment data, examinin...
Lenders offer “non-qualifying” mortgages (non-QM) to borrowers whose financial and/or property profiles fall outside conventional guidelines.
Generally speaking, a loan “qualifies” if:
(1) Points and fees are less than or equal to 3% of the loan amount (for loan amounts less than $100K, higher percentage thresholds are allowed).
(2) There are no risky features like negative amortization, interest-only, or balloon loans.
(3) The maximum loan term is less than or equal to 30 years,
(4) The borrower debt-to-income ratio is 43% or less. Any loan that is eligible for purchase, guarantee or insurance by a GSE (Fannie Mae or Freddie Mac), VA, USDA or FHA is QM regardless of the debt-to-income ratio.
Most borrowers can meet their needs with one of these typical “qualifying” loans. Programs like Conventional, FHA, VA, and USDA do a good job of qualifying borrowers with a range of incomes, credit scores, and down payments.
Lenders also offer “non-QM” loans to borrowers that have special needs.
The phrase “qualifying mortgage” is a new one. The standard was implemented in 2014 by the Consumer Financial Protection Bureau (CFPB) as an industry safeguard for both lenders and borrowers.
Lenders take on greater risk by underwriting non-QM loans, so they require very specific qualification standards to asses the borrowers ability (and likelihood) to repay the loan. Specifically, lenders offering non-QM loans must maintain a minimum 5% stake in that loan for the life of the loan rather than selling the loan entirely as is typically the case with QM loans.
Non-QM loans allow borrowers to finance a variety of property types with flexible loan terms.
One common type of non-QM loan is jumbo financing. The loan limit for conforming (30-year and 15-year fixed), FHA, and VA loans is $417,000. High balance exceptions exist for the higher-cost real estate areas – of which San Luis Obispo County qualifies. “High balance” loans in SLO County go up to $561,200 for conforming, FHA and VA products. “Jumbo” loans are any loan amounts exceeding these thresholds.
Please see the jumbo financing page for a few examples of Central Coast Lending’s specialty non-QM loan program offerings:
As both a direct lender and a mortgage broker, Central Coast Lending has uniquely positioned itself to offer a loan program for every need. Give us a call at 805.543.LOAN with any questions or to set up a free pre qualification session with one of our expert loan offers.
Creating an account is fast, easy, secure and FREE! Your account enables you to easily modify your loan application and view the status of your loan anytime day or night.
When you register for a Loan Center account, you can submit a loan application online and the sensitive information that you provide will be transmitted securely.
Pre approval can be done in as little as an hour if you have thoroughly completed the loan application and have all the needed paperwork to support the information on the application.
The October Economic Update dives into key economic indicators like Federal Reserve interest rates, inflation, and employment data, examinin...
Discover the latest changes in real estate commissions and how they impact homebuyers and sellers. Learn about the new rules, why they matte...
In September 2024, the Federal Reserve made a surprising move by cutting interest rates by 50 basis points. This analysis dives into the rea...
Explore the benefits and eligibility requirements of USDA loans, designed to provide affordable home financing to rural homebuyers. Learn ab...
Explore the world of renovation loans and learn how to finance your home improvement projects. This comprehensive guide covers types of reno...
Unlock the potential of your home equity with a reverse mortgage loan. Learn how reverse mortgages work, their benefits, eligibility require...
Unlock the potential of your home equity with a reverse mortgage loan. Learn how reverse mortgages work, their benefits, eligibility require...
Farm and ranch loans are tailored financial products designed to meet the unique needs of agricultural operations. This comprehensive guide ...
FHA Loans, insured by the Federal Housing Administration, provide an affordable pathway to homeownership, especially for first-time buyers a...
Jumbo loans are a significant financial product for borrowers seeking amounts exceeding conventional loan limits. This detailed guide explor...
Navigating the world of home financing can be complex, especially when deciding between a Home Equity Line of Credit (HELOC) and a fixed-rat...
Down payment assistance programs can make homeownership more attainable by reducing the financial burden of upfront costs. This comprehensiv...
HomePossible Loans, sponsored by Freddie Mac, provide a flexible and affordable mortgage option for low to moderate-income borrowers. This g...
Discover the benefits and requirements of HomeReady Loans, a flexible mortgage option designed for low- to moderate-income borrowers. Learn ...
Explore everything you need to know about conventional loans, including eligibility criteria, types of loans, benefits, and the application ...
Discover the key differences between APR and interest rate when it comes to mortgage loans. Central Coast Lending explains why understanding...
Curious about the timeline for home loan approval? Central Coast Lending breaks down the steps and average duration of the mortgage approval...
Applying for a home loan involves gathering a comprehensive set of documents to verify your financial status. This guide covers the essentia...
Mortgage points can help reduce your interest rate and overall loan cost. This comprehensive guide explains what points are, how they work, ...
Discover the diverse range of home loans available for first-time home buyers. Central Coast Lending explains the differences between FHA, V...
Discover the essentials of mortgages with Central Coast Lending. This guide explains what a mortgage is, how it works, and provides first-ti...
Your home is more than just a place to live; it's an investment that can provide you with financial flexibility and opportunities. By tappin...
Purchasing a home is a significant milestone and a dream for many individuals and families. However, navigating the world of mortgages can b...
Financial literacy is a crucial life skill that empowers individuals to make informed decisions, achieve their goals, and secure their finan...
Owning a home is a significant investment, and your mortgage plays a crucial role in determining your long-term financial stability. As time...
Buying a home is a significant milestone and a dream for many individuals and families. However, the process of purchasing a home can be com...
When it comes to buying a home, your credit score plays a crucial role in determining your eligibility for a mortgage and the interest rates...
Understanding how to qualify for a mortgage is essential for homebuyers. Central Coast Lending breaks down the key factors, including income...
Buying a home is a significant milestone and a major financial commitment. One of the biggest hurdles for many aspiring homeowners is saving...
Wondering how much house you can afford? Central Coast Lending helps you understand the factors that influence your home buying budget and p...
In today's fast-paced world, it's easy to accumulate various forms of debt, from credit cards to personal loans, student loans, and more. Ju...
For many homeowners, private mortgage insurance (PMI) is an unavoidable expense when purchasing a home with a down payment of less than 20%....
As a homeowner, you may have heard the term "refinancing" mentioned frequently, especially when interest rates fluctuate. Refinancing involv...
As a homeowner, your property is not only a place to call home but also a valuable asset that can be leveraged to achieve your financial goa...
When embarking on the journey of homeownership, one of the first steps is to understand your financial standing and mortgage eligibility. Th...
When it comes to securing a mortgage and achieving the dream of homeownership, your credit score plays a crucial role. Lenders use your cred...
When you're in the process of buying a home, one of the critical steps is the home appraisal. This independent evaluation of the property's ...
Confused about mortgage insurance? Central Coast Lending explains everything you need to know about PMI, MIP, and other related costs. Under...
The mortgage industry has traditionally been a slow-moving sector, often lagging behind other industries in adopting new technologies and in...
For those who have served in the United States military, the path to homeownership can be paved with unique challenges and opportunities. Wh...
Buying a home is a significant financial milestone, but for many aspiring homeowners, the upfront costs can be a major barrier to entry. Tra...
As a prospective homebuyer or homeowner, staying informed about mortgage rate trends is crucial for making informed decisions about your fin...
The Federal Reserve, commonly referred to as the Fed, plays a significant role in shaping the economic landscape of the United States. Its m...
Securing a favorable mortgage rate is a critical factor in determining the affordability and long-term costs of homeownership. As a prospect...
When it comes to buying a home, one of the most common questions first-time homebuyers ask is, "How much do I need for a down payment?" The ...
Buying your first home is an exciting milestone, but it can also be a daunting process. With so many factors to consider, from securing fina...
As interest rates begin to climb, potential homebuyers are left wondering how this will impact their mortgage prospects. In this comprehensi...
Discover how urban mobility innovations are reshaping the real estate landscape, from transit-oriented development to the integration of aut...
Sustainable housing is at the forefront of real estate innovation, with a growing emphasis on green building practices and eco-friendly feat...
Explore how the shift towards remote work is influencing housing preferences, urban dynamics, and commercial real estate, providing valuable...
Explore the profound impact of the COVID-19 pandemic on the real estate industry and the significant changes shaping the landscape in 2024. ...
Explore the latest trends shaping the housing market and gain valuable insights for navigating the dynamic landscape as a prospective homebu...
Discover effective strategies for saving for a down payment and turning your dream of homeownership into reality. From setting savings goals...
Gain valuable insights into navigating the mortgage process, whether you're a first-time homebuyer or seasoned homeowner. Discover essential...
Discover essential tips for first-time homebuyers to navigate the process of finding their dream home with confidence and ease. From setting...
Discover the essentials of mortgage interest rates with Central Coast Lending. This guide explains how mortgage rates are determined, the di...
Discover the diverse landscape of mortgage types and find the perfect fit for your homeownership journey. Explore fixed-rate, adjustable-rat...
Navigating the mortgage qualification process can be daunting, but this step-by-step guide breaks it down into manageable tasks. From checki...
Understanding mortgage closing costs is crucial for any homebuyer. Central Coast Lending breaks down what you need to know about these fees ...
Discover how student loan debt affects your ability to buy a home and learn strategies to manage this financial aspect effectively. From und...
Learn how to strategically manage debt while pursuing homeownership with these practical steps. From assessing your current debt situation t...
Learn how to navigate the real estate market on a budget with these practical tips for finding affordable properties. From defining your bud...
Explore the advantages and drawbacks of co-signing a mortgage for a family member or friend. Gain valuable insights into the financial respo...
Discover the key factors influencing how much you should save for a home down payment...
Unlock the benefits of refinancing your mortgage in California...
Discover how effective money management can pave the way for successful homeownership in California. From creating a realistic budget to bui...
Understanding and managing your Debt-to-Income (DTI) ratio...
Unlock the doors to favorable mortgage terms....
Making an offer on a home can be an exciting but nerve-wracking. Here are some tips to help you negotiate the best price....
Making an offer on a home can be an exciting but nerve-wracking. Here are some tips to help you negotiate the best price....
Making an offer on a home can be an exciting but nerve-wracking. Here are some tips to help you negotiate the best price....
Making an offer on a home can be an exciting but nerve-wracking. Here are some tips to help you negotiate the best price....
When it comes to buying a home, location is one of the most critical factors to consider. The neighborhood you choose can have a significant...