Non-qualified or non-QM loans are a particular type of residential mortgage designed for a borrower who doesn’t qualify for a conventional loan. These loans are intended to serve borrowers whose income has a higher likelihood to fluctuate than those in salaried positions. Non-QM loans typically apply to certain individuals, such as:
- Business owners
- Contract workers
- Gig-economy workers
Non-QM lenders have alternative methods of verifying income, such as bank statements or liquid assets. As a result, these loans typically have a lower ceiling than conventional loans. Many types of wholesale lenders offer non-QM mortgages. As non-salaried employment continues to become more common, these loans are accounting for a larger portion of residential mortgages and continue to grow.