Are you ready to embark on the exciting journey of homeownership? Understanding the nuances of mortgage financing is crucial. In this comprehensive guide, we'll walk you through two primary mortgage categories: Qualified Mortgages (QM) and Non-Qualified Mortgages (Non-QM).
Qualified Mortgages (QM):
A Qualified Mortgage, often referred to as a QM, is a type of home loan that meets specific criteria set by the Consumer Financial Protection Bureau (CFPB) to ensure borrowers are offered safer and more sustainable mortgage options. Here are the key characteristics of QM mortgages:
QM mortgages are designed to be more stable and predictable for borrowers, making them a popular choice for those seeking long-term homeownership with reasonable terms and protections.
Non-Qualified Mortgages (Non-QM):
Non-Qualified Mortgages, or Non-QM loans, are home loans that do not meet the strict criteria set by the CFPB for Qualified Mortgages. As a result, they offer more flexibility but may come with different terms and requirements:
Non-QM mortgages provide flexibility to borrowers who may not meet the strict criteria of QM loans. However, they may come with higher interest rates and different terms to compensate for the added risk associated with these loans.
Choosing between a QM and Non-QM mortgage depends on your financial situation, goals, and risk tolerance. It's essential to carefully consider both options and consult with a mortgage professional from Ferrari Lending to determine which is the best fit for your needs.
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