The downward trend forecasted shows origination to decrease to $2.05 trillion in the upcoming year, down from $2.26 trillion predicted for 2022. Those who are actively getting ahead of the trend curve, have been focused on adaptation, improvisation, and evolution in focus on previously underserved markets.
The shift to Non-QM requires mortgage brokers to first educate and awaken potential borrowers to the opportunities that exist. The doom and gloom on the evening news does not adequately reflect the availability and opportunity to make a significant impact on an investor’s long-term portfolio. Consider the buyer who has built considerable equity and is looking to convert that into an expanded portfolio. Likewise, Non-QM loan products exist for the professional seeking to make an initial home purchase or to tap into the short-term rental market.
Other potential borrowers under the proverbial stone:
- Gig workers
- Workers with a productive side hustle
- Borrowers with a life event, such as a divorce
- A borrower who switched gears during the pandemic
- That YouTuber kids can’t stop watching
Mortgage brokers need to consider incorporating additional avenues in combination with agency programs with current and projected decreases, that much is clear. With eyes set on introducing Non-QM products to potential clients, there’s the added bonus of fueling investor clients for life with potential refinancing and additional properties to acquire.
While diverting from agency guidelines, Non-QM lenders like Champions Funding outline a potential borrower’s ability to repay without the arduously heavy burden of traditional income or employment documentation requirements. Instead, a reliance upon common sense evaluation across credit, collateral, and capacity relative to reserves and down payment are a viable means to serve an expanded population of borrowers. Additionally, providing programs where an investment property’s cash flow can function as the qualifier: with unique niches and features such as vacant properties qualifying with proposed rental income. Plus, the agency loan limits on higher-valued purchase properties don’t exist with Non-QM.