NonQM Flashcards
(25 cards)
What does ‘Non-QM’ stand for in mortgage lending?
Non-Qualified Mortgage.
True or False: Non-QM loans are designed for borrowers who do not meet the standard requirements of qualified mortgages.
True.
Fill in the blank: Non-QM loans often cater to __________ borrowers.
high-risk.
What is one characteristic that differentiates Non-QM loans from QM loans?
Non-QM loans do not have to meet the strict requirements set by the Consumer Financial Protection Bureau (CFPB).
Which type of income documentation is commonly accepted for Non-QM loans?
Alternative income documentation, such as bank statements.
Multiple Choice: Which of the following is NOT a common feature of Non-QM loans? A) Interest-only payments B) Fixed-rate terms C) No income verification
B) Fixed-rate terms.
What type of borrowers might benefit from Non-QM loans?
Self-employed individuals or those with irregular income.
True or False: Non-QM loans carry higher interest rates compared to traditional QM loans.
True.
What is a potential downside of Non-QM loans?
They may come with higher fees and stricter terms.
Fill in the blank: Non-QM loans can be used for __________ properties.
investment.
What does DTI stand for, and why is it important in the context of Non-QM loans?
Debt-to-Income ratio; it helps lenders assess a borrower’s ability to repay.
Which of the following is a common type of Non-QM loan? A) FHA loan B) Jumbo loan C) VA loan
B) Jumbo loan.
True or False: Non-QM loans are subject to the same regulations as QM loans.
False.
What is a common reason borrowers choose Non-QM loans over traditional loans?
Flexibility in qualifying and documentation requirements.
Fill in the blank: Non-QM loans can help borrowers with __________ credit histories.
less-than-perfect.
What is one advantage of Non-QM loans for investors?
They can finance properties that do not meet standard lending criteria.
Multiple Choice: Which loan type is typically considered a Non-QM loan? A) USDA loan B) Subprime loan C) Conventional loan
B) Subprime loan.
True or False: Non-QM loans allow for more creative financing options.
True.
What is the primary purpose of Non-QM loans?
To provide financing options for borrowers who do not fit into traditional lending categories.
Fill in the blank: Non-QM loans are often used by __________ looking to purchase or refinance properties.
investors.
What is a common misconception about Non-QM loans?
That they are only for borrowers with poor credit.
True or False: Non-QM loans can be fixed-rate or adjustable-rate.
True.
What does the term ‘seasoning’ refer to in Non-QM lending?
The length of time a borrower has held an asset or income source.
Fill in the blank: Non-QM loans may allow for __________ payment plans.
interest-only.
