Non-QM solutions in a volatile rate environment
“Volumes are up – not just for us, but it seems like all non-QM lenders,” he said. “It’s all about consistency. The main rush that was there throughout the second half of the pandemic has faded. Prime rates are volatile and brokers find that great consistency is not provided by QM. »
Prime rates can change several times a day, and lately, with many external variables seemingly potentially impacting rates, consumers are wary of these rapid changes. One day, a borrower with a loan at a particular rate could receive $2,000 in credit and an additional $2,000 in redemption fees for the same rate and the same loan. In contrast, non-QM programs and rates provide a safe haven from this volatility since rates typically adjust once or even twice a month.
“Non-QM products are making a comeback, brokers and borrowers have the option to refinance or buy, using their capital and assets in a very productive way,” Fisher said.
Non-QM is not just alternative income bank statement lending, but it can also mean a variety of asset-backed lending options that adapt to the needs of the borrower. Full-doc to 1099 programs, DSCR programs for investors, and loans for foreign nationals, the programs have grown not only to meet market demands, but they replace lost refinance volume by allowing previously inaccessible borrowers to now access the home financing and investors in a responsible manner.
Fisher said more and more initiators are adding non-QM products to their toolbox.