In July of 2020, the government estimated that 57% of Americans were unable to work due to coronavirus restrictions, business closures, or covid-19 exposure concerns. As you can imagine, all of those Americans still needed to eat, so they still needed access to money. Families that were reliant on those income streams had no choice but to look for alternative ways to make a living.
That made for not only a difficult tax year, but it also complicated things like taking out a mortgage. So, what can we expect in 2022 and beyond when it comes to alternative mortgage loans? Learn everything you need to know below.
How the Pandemic Increased the Need for Non-QM Loans
You might be wondering what the connection is between the pandemic and a big increase in the need for Non-QM loans. Since the pandemic impacted so many people’s jobs, many Americans started freelancing, working as independent contractors, or even opening their own businesses. In other words, their income streams started to come from different sources.
This type of non-traditional way of earning money impacts your ability to take out a traditional mortgage. A traditional lender will be hesitant to work with you if they don’t see a steady, reliable income stream. The good news is that Non-QM loan options allow Americans with non-traditional income sources to still secure a mortgage.
What to Expect in 2022 and Beyond
While the pandemic drastically increased the overall need for non-QM loans, what should we expect in 2022 and beyond? Industry experts suggest that rising interest rates will have an impact on the need for non-QM loans. Why? Experts say when you start seeing rates go up in general for traditional products, QM products are going to go up, too. As a result, more Americans will flock toward Non-QM options.
Another important consideration is the rising rent prices across the nation. Because rent continues to climb to all-time highs, more Americans are becoming interested in investing in longer-term opportunities like homes.
Further, the pandemic-induced shift in employment habits has remained in place. More Americans are self-employed, business owners, or independent contractors than prior to the pandemic. Industry experts also agree that the majority of non-QM loans are for self-employed borrowers. The gig economy often results in inconsistent income streams, which can prove difficult to use for traditional mortgages. Many Non-QM loan providers offer solutions for the 1099 gig worker or W-2 tip worker.
Are You Looking at Your Non-QM Loan Options?
Have you currently found yourself in a position where you might need to utilize a Non-QM loan option to secure your dream home? If so, then we have some great news for you. Our team has been providing Non-QM loans to citizens just like you for years. We want to help you make your dreams come true, too.
Check out our loan requirements now, or get in touch with our office at (800) 413-0240 to learn more about our Non-QM loan options.
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