A non-QM (non-qualified mortgage) loan is a legitimate, fully underwritten mortgage product that doesn't meet the strict federal guidelines for a "qualified mortgage." That doesn't mean it's predatory or unsafe — it means it allows for alternative documentation, different credit timelines, or borrower profiles that conventional programs won't accommodate.
After a bankruptcy, foreclosure, or short sale, conventional and FHA programs require mandatory waiting periods before you can apply again: 2 years after a Chapter 7 bankruptcy for FHA, 4 years for conventional. Foreclosure waiting periods are 3 years for FHA, 7 years for conventional. These timelines exist to protect lenders, but they can feel punishing for borrowers who've recovered financially and are ready to own again.
Some non-QM programs allow applications as early as 1 day after a bankruptcy discharge or foreclosure completion. Most practical programs require 12-24 months with compensating factors: a substantial down payment (typically 20-30%), demonstrated credit rebuilding, and strong reserves. The key is that non-QM lenders evaluate your recovery, not just the event itself.
A clear explanation of what happened and evidence that it's behind you. Clean credit activity since the event — on-time payments, low utilization, no new derogatory items. A meaningful down payment (20%+ is common). Stable income and employment. A property that makes financial sense.
Non-QM rates after a credit event are higher than conventional — typically 2-3% above standard rates, depending on how recent the event was and how strong your recovery profile is. Rates improve as time passes and your credit rebuilds. Many borrowers use non-QM as a bridge: buy now with a higher rate, rebuild for 12-24 months, then refinance into conventional at a dramatically better rate.
At AFC Mortgage Group, we don't judge your past — we evaluate your present. If your financial recovery is real and your deal makes sense, we'll find the right non-QM program. If you're not quite ready, we'll tell you what to work on and when to come back.
Call (203) 452-9899 for a confidential conversation.
AFC Mortgage Group LLC | NMLS #2801 | Monroe, CT | Licensed in 17 States
Become homeowners. AFC Mortgage Group will help you navigate the loan process, secure financing, and purchase your dream home.
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