Myth 1
"Non-QM loans are too expensive"
Facts:
- Agency LLPAs can add 100+ bps to conventional rates on cash-outs, investment properties, and lower credit scores.
- Non-QM programs often remove or reduce many of these add-ons, creating a competitive pricing advantage.
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Myth 2
"Non-QM is too niche — there’s not enough demand"
Facts:
- Non-QM originations grew from 5.2% to 8.0% of total mortgage volume in one year.
- Non-conforming loans overall (including Non-QM + Jumbo) now make up nearly 17% of the market.
- Demand from self-employed borrowers, investors, and alternative income clients is growing rapidly.
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Myth 3
"Non-QM is subprime all over again, like 2008"
Facts:
- Today’s Non-QM loans require fully documented income, reasonable credit scores, and significant skin in the game.
- Delinquency rates on Non-QM loans remain well below 2%, even through economic volatility.
- Modern Non-QM ≠ 2008 subprime. It’s built on creditworthy borrowers with nontraditional income profiles.
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