What Non-QM means in practice
Qualified Mortgage (QM) is a CFPB definition tied to ability-to-repay safe harbors and product features. Non-QM is everything that is still a legal mortgage but does not fit that box — often because income is shown with bank statements, a DSCR ratio, or assets instead of two years of tax returns and a standard DTI.
Non-QM is not automatically “subprime.” Many files are high-asset or high-FICO self-employed borrowers. Pricing is usually higher than conforming. Investor overlays (credit floor, LTV, reserves, prepay on investment property) do the real work.
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