Loan Options
Qualified Mortgages (QM)
The benefit of working with an independent mortgage broker, is that we do not work directly with any ONE lender. We are independent from all the banks, credit unions, and mortgage lenders. We work for you to find the best lender.
If we can't get you a loan type at one bank, we can always try the next. With Nexa Mortgage's platform, I have the most extensive access to the most lenders in the country, to help you secure the best interest rates and/or costs for your situation.
A qualified mortgage is a loan that meets certain criteria set by the Consumer Financial Protection Bureau (CFPB), such as a verified income, reasonable debt-to-income ratio, and stable employment history.
Qualified Mortgages are the most common type of loans you will be offered and consider. VA, FHA, USDA and Conventional are the 4 main types of QM loans. Each of these types of loans have a few variations from first time buyers, to home renovation loans.
These loans are considered less risky for lenders and offer some protections for borrowers. On the other hand, non-qualified mortgages do not meet the guidelines set by the CFPB and therefore can be riskier for both borrowers and lenders.
FHA
FHA Loans are typically the choice of first-time home buyers. The costs are more favorable to lower credit scores and offer down payment options as low as 3.5% of your purchase price, first time homebuyer or not. These loans can be paired with Down Payment Assistance Programs and Grants. or Renovation loans.
Conventional
Conventional loans are probably the common type. Down payments start at 5% (unless you are a first-time-home buyer, then it is 3%) and typically have lower monthly costs than FHA. They are better for borrowers with higher credit scores and more money to put down on their home.
VA
One of the main advantages is the opportunity to purchase a home with no down payment. Additionally, VA loans often have lower interest rates compared to conventional mortgages, which can result in significant savings over the life of the loan. These benefits make VA home loans an attractive option for military personnel looking to become homeowners.
USDA
Like VA loans, USDA loans do not require a down payment, making it more affordable for buyers who may not have a large amount of savings. Another benefit is the flexible credit requirements, allowing individuals with less-than-perfect credit to still qualify for a loan. USDA loans are a valuable resource for rural homebuyers, offering affordability, flexibility, and the chance to achieve the dream of homeownership.
Non-Qualified Mortgage (Non-QM)
Non-qualified mortgages do not meet the guidelines set by the CFPB and therefore could be riskier (not necessarily every the time) for both borrowers and lenders.
Non QM mortgages may offer more flexibility for borrowers who do not meet the strict criteria of a qualified mortgage, such as self-employed individuals or those with non-traditional sources of income.
These loans are never sold to another bank or lender after closing because these loans are originated and created by that specific bank and ONLY meet their guidelines.
Most banks to not originate Non QM loans. They are not cookie-cutter loans, but customizable to borrower's unique financing needs. That does not mean more riskier. But you should beware, they do not follow any guidelines. For example, a credit union could offer loans with 40-year terms but still follow all other QM guidelines. (QM loans are capped at 30 years).
Here are 4 examples of more typical Non-QM loans.
Construction Loans
Construction loans are a type of financing that enables individuals or businesses to build their own properties. These loans are specifically designed to fund the cost of constructing a new building or renovating an existing one. The funds received from a construction loan can be used for purchasing land, paying for labor and materials, and covering any other expenses related to the construction process.
Unlike traditional mortgage loans, construction loans are typically short-term and have higher interest rates. They are often structured in a way that allows borrowers to draw funds in stages as the construction progresses.
Once the construction is completed, the loan is either converted into a permanent mortgage or paid off in full. Construction loans provide a crucial financial resource for those looking to embark on new construction projects.
DSCR Loans
Debt Service Coverage Ratio (DSCR) loans are the goldilocks of the mortgage world. If you are looking to buy an investment property, you used to have only 2 options: Conventional loans or Private lenders. Both are on opposite sides of the spectrum.
Conventional loans will ask you for FULL documentation of every slip of paper you've encountered from the last 2 years of your life.
Private lending however, will ask you have a pulse and offer you the cash. (Those definitions are hyperbolic but you get the idea.) Conventional has lower rates but it comes at a price of turning over lots and lots of paperwork to the lender, they want to make sure you are able to afford this investment property and the risks. Private lenders will not require much documentation or verify as much info by charging you a higher interest rate.
However, DSCRs now fit right in-between those two options. They only require the property being purchased to make more in rental income than the mortgage payment. If they do, that is about the only documentation needed from you. No tax returns or income needed. Typically still need 20% down payment but the interest rates are much lower than private lending.
Bank Statement Loans
Clients that are self employed and small business owners know the pain of trying to get a QM mortgage due to the amount of documentation needed and required by the banks and lenders in order for them to be approved.
Bank Statement loans or also called, 1099 loans, allow self-employed borrowers more opportunities to find a loan product for them if they do not feel like providing 2-3 years of their business and personal tax returns.
Think of these as the fast pass at Disney World to avoid the long lines.
ITIN Loans
An ITIN home loan is a mortgage program specifically designed for individuals who do not have a social security number but have an Individual Taxpayer Identification Number (ITIN). This type of loan allows non-U.S. citizens, including undocumented immigrants, to purchase a home in the United States.
ITIN home loans offer a viable solution for those who may not qualify for traditional mortgages due to their immigration status. These loans often have more flexible eligibility requirements and can be obtained with a smaller down payment compared to conventional loans. However, it is important to note that ITIN home loans usually come with higher interest rates and fees.
Let us know if you have any specific questions about any type of home loan you are interested in. Please click on the "contact" page or call (804)601-4440 to get started!
Home mortgage loans are classified into to broad two groups, Qualified Mortgage and Non-Qualified Mortgage loans.
Loan options available with the Vrbicek Mortgage Team:
Purchase Loans:
Conventional, FHA, VA, & USDA
Down Payment Assistance
First Time Home buyer programs
Investment property loans
Renovation loans (incl FHA 203k
Fix and Flips
DSCRs (debt service coverage ratio)
Jumbo up to $10m
Bank Statement/1099 Loans
ITIN (Indiv Taxpayer Identification Number) Loans
Refinance Loans:
Conventional - Rate/Term or Cash Out
FHA - Rate/Term or Cash Out
VA - Rate/Term or Cash Out
USDA - Rate/Term or Cash Out
Home Equity Loan
Home Equity Lines of Credit
DSCRs (debt service coverage ratio)
Bank Statement / 1099 Loans
