I’ve seen folks get excited about non-QM loans, especially self-employed people or those with unique income streams. But yeah, the rates can sting. Has anyone here actually run the numbers comparing a non-QM to waiting and qualifying for a conventional? Sometimes the difference is bigger than you’d think.
CONFUSED ABOUT LOANS THAT DON'T FIT THE BOX
Has anyone here actually run the numbers comparing a non-QM to waiting and qualifying for a conventional? Sometimes the difference is bigger than you’d think.
I’ve been looking at this exact thing lately. I’m self-employed, so the non-QM stuff kept popping up in my searches. The rates really do make you pause... I mean, it’s tempting to just go for it and finally get a place, but when I ran the numbers, the monthly payment difference was kind of wild. Like, not just a few bucks—hundreds more each month.
It’s tough because waiting feels risky too (what if prices keep going up?), but locking into a higher rate for years just didn’t sit right with me. I guess it depends how urgent it is for you to buy now vs. maybe waiting a bit and working on qualifying for conventional. For me, patience won out, even though I’m itching to move.
Totally get why people consider non-QM loans though—sometimes you just want to get in the door, literally. But yeah, those rates are no joke.
I’ve run the numbers a few times and honestly, the spread between non-QM and conventional can be brutal, especially if you’re planning to hold the property long-term. But I’ve noticed some folks use non-QM as a bridge—buy now, refi later when they can qualify for conventional. Has anyone here actually had success with that approach, or does it end up costing more in the long run? I’m always wary of banking on future rates dropping, but maybe I’m just too cautious...
I’ve noticed some folks use non-QM as a bridge—buy now, refi later when they can qualify for conventional. Has anyone here actually had success with that approach, or does it end up costing more in the long run?
I went down that path last year. Here’s how it played out for me:
1. Closed with a non-QM loan (higher rate, fees weren’t pretty).
2. Six months in, my credit and income lined up for conventional refi.
3. Refinanced, but I had to factor in two sets of closing costs plus about 8 months of higher payments.
If you’re super sure you’ll qualify soon and rates don’t spike, it can work. But if you’re “banking on future rates dropping,” that’s where it gets dicey. I’d run worst-case numbers before jumping in—sometimes the math just doesn’t add up.
NON-QM AS A BRIDGE: WORTH IT?
That’s a solid breakdown. I’ve seen a few clients try the same thing—sometimes it works, sometimes it’s a headache. The double closing costs can sneak up on you, especially if you’re not watching the calendar. Curious, did you run into any issues with appraisal values changing between the two loans? I’ve had folks get caught off guard when the market shifted a bit in just a few months. Wondering if that was a factor for you or if it all lined up.
