thoughts on Non-QM loans vs HML

[D Higgs]

Currently in the process of running numbers getting more and more comfortable with analyzing deals. Came across an interesting video that made me curious if anyone had previous experiences with this sort of financing. Does anyone have thoughts (good/bad) on Non QM loans? I know the pros/cons of Hard Money loans, but from the few sites i researched it seemed Non QM loans are much more attractive. Please advise!

[David M.]

@D Higgs

I think there are a couple of key issues you need to realize and see how it fits in your investing strategy.  Hard money loans are short term by definition (6-12 months), includes lending on reno costs, doesn't really care about the condition of the property, and if you plan on keeping the property you will need to be able to qualify for some sort of long term loan anyway.  A non-QM loan is like a regular conforming loan so you still need a "livable" property and doesn't provide for reno costs.

They are two different products. In fact, you may need both. You purchase a very distressed property with the HML, then after the renovation is complete your refi with the non-QM loan and keep it as a rental. Of course, you should get yourself qualified BEFORE you start the deal in the first place.

I hope that helps.  Good luck.