Building your own home is one dream that we all have. We all want our homes to be perfect and we want them to be a complete representation of us. Although, building our homes doesn’t come for free – in fact, purchasing the land and constructing the house involves a lot of money. We usually get the big sum of money through loans. Making a loan basically means that you borrow money from a loaner, and then you pay this money overtime with interest.
Qualified mortgages i as a kind of mortgage loan that meets the lending standards that is established by different government agencies. Qualified mortgages usually follow a very strict, rigid backbone and the terms that have to be met are black or white. The rigidity of the system for traditional qualified mortgages can sometimes deny even high-income borrowers. Even if these high income borrowers can prove that they can pay the loan over time, when a certain standard isn’t met, they get denied. This prevents borrowers with income that isn’t standard, like self-employed individuals, freelancers, foreign nationals, that do have a substantial amount of income, be denied for making a loan.
There is a new kind of mortgage loan that isn’t as strict as a qualified mortgage loan – a new mortgage lending solution that doesn’t enforce such a rigid and strict system. These are Non Qualified Mortgage Loans. Non Qualified Mortgage Loans uses a different guideline when it comes to approving the loan. Although, it all boils down to one single rule: the ability to pay back the loan. Non Qualified Mortgage Loans look at this “ability to repay” rule differently than Qualified Mortgage Loans. There are alternative documentation that allow non-traditional income earners to prove that they have the capacity to make a loan and repay overtime.
New Residential Investment Corp., which is now ran by Michael Nierenberg, is a REIT or a Real Estate Investment Trust that enforces both Qualified Mortgage Loans and Non Qualified Mortgage Loans. They operate on origination services on ongoing businesses and investment decisions. The portfolio and the subsidiaries of New Residential Investment Corp. is a mix of both Non and Qualified Mortgage Loans.