In the world of home lending, each buyer has a unique story. Many prospective buyers are well-qualified but may need a lending solution beyond the options offered by conventional and government loans. At Northpointe Bank, we share your dedication to helping more borrowers achieve their dream of homeownership. That's why we’ve developed a suite of Non-Qualified Mortgage (Non-QM) products as part of our Expanded Portfolio.

What is a Qualified Mortgage (QM)?

To understand the value of Non-QM options, let’s start with the basics of a Qualified Mortgage. In short, a QM is a category of loans that have certain, more stable features that help make it more likely that you’ll be able to afford the loan. A QM loan avoids certain high-risk features, including but not limited to:

• Limits on points and fees.

• Requirements to verify income, assets, and debts.

• Controls on APR (annual percentage rate) to prevent exorbitant interest rates.

How Northpointe Bank’s Expanded Portfolio Benefits Borrowers

Northpointe Bank’s Expanded Portfolio is designed to provide solutions for diverse borrower needs. Here’s a closer look at how these options can make homeownership possible for more clients.

1. Self-Employed Borrowers

Self-employed borrowers often face challenges qualifying for traditional loans since they may write off significant expenses, lowering their reported income. With our Expanded Portfolio:

• Bank statements can be used to assess income. Personal or business statements over a 12- or 24-month period can serve as proof of income.

• A 12-month Profit and Loss Statement (P&L) prepared by a CPA can also be accepted, providing a more accurate financial picture based on revenue and expenses.

2. Cash Earners

For borrowers who receive cash or tips as income, traditional pay stubs and tax returns might not reflect their actual income. Northpointe Bank’s Expanded Portfolio offers options tailored for these cases:

• A form completed by the employer, detailing compensation structure, can be used in place of traditional documentation, verifying the borrower’s employment history and earnings.

3. Borrowers with Significant Assets

For clients with heavy assets but limited monthly income, our Asset Depletion Program provides an ideal alternative:

• Qualifying income is calculated from liquid assets (such as savings, stocks, or retirement accounts) divided over seven years.

• This option is particularly valuable for retired or semi-retired borrowers, and those with wealth but low monthly income.

4. Investment Property Financing

Financing for investment properties has become more restrictive and expensive. Our Expanded Portfolio includes Debt Service Coverage Ratio (DSCR) loans, also known as the Investor Cash Flow program. DSCR loans provide a great option for investors by focusing on the rental income from the property rather than personal income, making it easier for investors to qualify.

5. Borrowers with Negative Credit Events

For those with a history of credit challenges, Northpointe’s Expanded Portfolio includes options that are more lenient than traditional loans:

• Our New Start Program allows financing for borrowers with recent credit events, provided they have no 90-day late payments on their home loan in the past 12 months.

• Common qualifying events include short sales, foreclosures, bankruptcies, and loan modifications.

Every buyer’s path to homeownership is different, and not everyone fits the traditional QM loan mold. Northpointe Bank is committed to providing flexible lending solutions to bring more buyers home.

Reach out today to learn more about our Expanded Portfolio options!