Offering Non-QM Loans to Your Clients – Why Mortgage Brokers Need to do this in 2023!

For most mortgage brokers, the last year has been tough. Coming off the highs of 2020 & 2021, mortgage brokers are seeing a rapid decline in their business. One way to add additional income this year is to help clients that may have not fit into an Agency loan in the past. As you know that your clients come to you with unique financial situations and needs. While traditional mortgages work well for many borrowers, there are some who don’t fit the mold of a conventional borrower. That’s where non-qualified mortgage (non-QM) loans come into play. Non-QM loans offer alternative underwriting standards and loan programs designed to meet the needs of borrowers who may not qualify for traditional mortgages. As a mortgage broker, offering non-QM loans can help you expand your client base and grow your business by providing options to those who have been turned away by other lenders. In this post, we’ll discuss how mortgage brokers can offer non-QM loans to their clients, the benefits of working with a non-QM lender, tips for finding the best non-QM lenders to partner with, how non-QM loans can help expand your client base and grow your business, and how to address common concerns and objections about non-QM loans. By the end of this post, you’ll have a better understanding of what it takes to successfully offer non-QM loans as a mortgage broker.

How to Offer Non-QM Loans to Clients

Before you can offer non-QM loans to clients, it’s important to understand the steps involved in the process. Here are some tips for offering non-QM loans as a mortgage broker:

1. Identify potential clients who may benefit from non-QM loans: Non-QM loans are designed for borrowers who don’t meet traditional underwriting standards. This can include self-employed individuals, those with high debt-to-income ratios, or those with credit issues. By identifying potential clients who fall into these categories and educating them on the benefits of non-QM loans, you can expand your client base and grow your business.
2. Understand the different types of non-QM loan programs: There are many different types of non-QM loan programs available, each with their own unique underwriting standards and requirements. Some common examples include bank statement programs for self-employed borrowers, asset-based lending programs, and interest-only programs for borrowers seeking lower monthly payments.
3. Partner with a reputable non-QM lender: To offer non-QM loans to your clients, you’ll need to partner with a lender who specializes in these types of loans. Look for lenders who have experience working with mortgage brokers and who offer competitive rates and flexible underwriting standards.
4. Market non-QM loans effectively: Once you’ve identified potential clients and partnered with a non-QM lender, it’s important to market these loan options effectively. Consider creating targeted marketing campaigns that highlight the benefits of non-QM loans for specific borrower scenarios (e.g., self-employed borrowers). Use social media platforms like LinkedIn or Facebook groups related to local real estate markets to reach out to potential customers.

By following these tips, mortgage brokers can successfully offer non-QM loan options to their clients and help those who may not qualify for traditional mortgages find financing solutions that meet their needs.

Benefits of Working with a Non-QM Lender

Partnering with a non-QM lender can offer many benefits for mortgage brokers. Here are some reasons why working with a non-QM lender can be advantageous:

1. Access to alternative loan programs: Non-QM lenders offer loan programs that may not be available through traditional lenders. This gives mortgage brokers the opportunity to provide financing options to clients who may not qualify for conventional mortgages.
2. Flexible underwriting standards: Non-QM lenders often have more flexible underwriting standards than traditional lenders, which can help borrowers who have unique financial situations or credit issues.
3. Competitive rates and terms: Despite the perceived risk associated with non-QM loans, many non-QM lenders offer competitive rates and terms that are comparable to traditional mortgage products.
4. Expertise in non-traditional lending: Non-QM lenders specialize in providing financing solutions for borrowers who don’t meet traditional underwriting standards. As a result, they have expertise in this area and can provide valuable guidance and support to mortgage brokers.
5. Partnership opportunities: Partnering with a non-QM lender can lead to long-term business relationships and referral opportunities, as well as potential cross-selling opportunities for other financial products.

By working with a reputable non-QM lender, mortgage brokers can expand their product offerings and provide financing solutions that meet the needs of a wider range of clients. As mentioned above, these types of loans are designed for borrowers who don’t meet traditional underwriting standards, which means that they can help you reach clients who may not qualify for conventional mortgages. Here are some ways that non-QM loans can help you expand your client base:

1. Serving self-employed borrowers: Non-QM loans often have more flexible underwriting standards than traditional mortgages, which makes them a good fit for self-employed borrowers who may have difficulty documenting their income.
2. Helping Foreign National (ITIN) Borrowers: Non-QM lenders may be more willing to work with foreign national borrowers who don’t have a U.S. credit score, making them an attractive option for clients looking to purchase a home in the United States.
3. Providing financing options for unique properties: Non-QM loans can be used to finance unique properties such as vacation homes, investment properties, and non-warrantable condos that don’t meet the requirements of traditional mortgage products.
4. Offering alternative loan structures: Non-QM lenders offer loan programs that may not be available through traditional lenders, such as interest-only mortgages or balloon payment loans. This gives you the opportunity to provide financing options that meet the specific needs of your clients.

By offering non-QM loans, you can differentiate yourself from other mortgage brokers and expand your client base by reaching borrowers who may not qualify for traditional mortgages. With the right marketing and outreach strategies, you can position yourself as an expert in non-traditional lending and build a reputation as a trusted advisor for all types of borrowers. Non-QM loans can be a great way to expand your client base and differentiate yourself from other mortgage brokers. By offering these types of loans, you’ll have access to alternative loan programs, more flexible underwriting standards, competitive rates and terms, expertise in non-traditional lending, and partnership opportunities. With the right marketing strategies and outreach efforts, you can position yourself as an expert in this field and build a reputation for providing financing solutions that meet the unique needs of all kinds of borrowers. Ultimately, by leveraging non-QM lender partnerships you’ll be able to create long-term relationships with customers who may not qualify for traditional mortgages.