Non-qualified mortgages offer more options for borrowers who:

Non-qualified mortgages offer more options for borrowers who:
A . are unemployed.
B . are self-employed.
C . have no down payment.
D . are currently living with their parents.

View Answer

Answer: B

Explanation:

Non-qualified mortgages (Non-QM) are designed to help borrowers who do not meet the standard documentation or income verification requirements of traditional qualified mortgages (QM). Non-QM loans provide more flexibility in underwriting guidelines and are often used by borrowers such as:

Self-employed individuals who may have inconsistent or difficult-to-verify income streams. These borrowers may use bank statements or asset-based verification instead of W-2 forms or tax returns to qualify for a loan.

Non-QMs cater to borrowers who have unique financial situations but still demonstrate the ability to repay. Non-QM loans are not necessarily high-risk but offer alternatives for those who don’t meet the stringent Qualified Mortgage rules.

Other options:

Unemployed individuals (A) typically cannot qualify unless they have alternative forms of income.

No down payment (C): Non-QM loans usually still require a down payment, though the amount may vary.

Living with parents (D) is not a relevant factor in Non-QM lending.

References:

Dodd-Frank Act and Ability-to-Repay (ATR) rule

CFPB guidelines on Qualified vs. Non-Qualified Mortgages