Cash-Out Mortgage Options With Non-QM Loans

This article will cover and discuss cash-out mortgage options with non-QM mortgage loans. GCA Forums Mortgage Group is excited to introduce new cash-out mortgage options on non-QM loans. There has been a lot of industry news surrounding cash-out mortgage options in 2025. In this blog, we will detail some of the recent changes, our new cash-out loan program, and how to apply for cash-out mortgage options on non-QM loans at GCA Forums Mortgage Group.

Changes Cash-Out Mortgage Options on VA Loans

In the calendar year of 2022, many agencies changed their guidelines around cash-out refinance mortgages. The U.S. DEPARTMENT OF VETERANS AFFAIRS announced the standard cash-out refinance loans will be capped at 90% loan to value (LTV). This is a 10% reduction from the old guideline, where the veteran could cash out to the full value of their property, 100% loan to value.

Mortgage Guidelines on 100% LTV Cash-Out Mortgage Options on VA Loans

This is the second recent guideline change for VA cash-out mortgages. The older guideline allowed the veteran to cash out up to 100% of the value of their home and then add the funding fee to that amount creating a combined loan-to-value of 103.3%. The great news is Gustan Cho Associates can still do a 100% cash-out refinance on VA loans.

Updated HUD Cash-Out Mortgage Options on FHA Home Loans

THE FEDERAL HOUSING ADMINISTRATION or FHA has also reduced their maximum loan-to-value threshold down to 80% from 85% loan-to-value. This is a 5% reduction from the old guideline that was in place for almost 10 years. These reductions are put in place to prevent the American people from equity stripping their properties. BEN CARSON was the former Secretary of HUD and he believes this new rule will reduce risks of cash-out refinancing on government-backed loans.

Reason For Lowering Loan-to-Value By Federal Agencies

When we see two major sectors of the mortgage industry change their guidelines in the same calendar year, that is usually a sign of what is to come. Conventional mortgages have had an 80% maximum loan to value limit for cash-out refinance and put in place for some time now. FHA has followed suit and the VA has lowered their maximum value required to help protect our veterans.

Building equity in a home is part of the American Dream. A mortgage is meant to be a long-term financial instrument to build wealth. Completing a cash-out refinance takes the equity out of your home. These new guidelines help keep a larger portion of equity in the homes of the American people.

Agency Versus Non-QM Cash-Out Mortgage Options

After the FHA announcement to lower the loan to value requirements from 85% down to 80%, we saw an uptick in applications for FHA cash-out refinance. Many Americans wanted to utilize the extra 5% before it went away. The good news is GCA Forums Mortgage Group have just rolled out a new cash-out mortgage options on non-qm loans that still allows 90% loan-to-value!

Non-QM Cash-Out Guidelines on Loan-To-Value

90% LTV Non-QM Cash-Out mortgage options on residential non-QM mortgages. That’s right, GCA Forums Mortgage Group have added a new loan program available through one of our investors that allows Americans to refinance their property up to 90% loan-to-value. Just like the good old days with an FHA cash-out refinance.

Other Non-QM Cash-Out Mortgage Options and Requirements

This product has a few expanded requirements. We will go over those below:

• 620 minimum credit score
• MAX DTI is 50%
• Full documentation (W2’s, Tax Returns, Pay Stubs)
• Bank Statement Income Allowed (24-month bank statements used to calculate self-employed income, higher rates usually apply)
• Primary Residence ONLY
• Property Types – Single Family Homes, Condos, Non- Warrantable Condos, 2-4 Unit Condos, or Townhomes, NO MANUFACTURED HOMES

Non-QM Cash-Out Mortgage Options and Eligibility Requirements

A few other exciting features of this loan program include

• Cash-out funds may be used to meet reserve requirements
• This is NOT the case with FHA, VA, or Conventional cash-out refinances
• With this 85% LTV loan, you may utilize the cash proceeds to pay off the remaining balance of a Chapter 13 bankruptcy
• Meaning you can use this loan to end your chapter 13 bankruptcy repayment plan
• Your home may NOT be listed for sale within the past 6 months of refinancing application date

If the home is listed for sale within this timeframe, you will be capped at 75% loan to value.

Documents Required To Start Mortgage Process

If you are reading this article, chances are you were interested in a cash-out refinance to the maximum loan to value threshold. How would you apply for this new loan product? Applying for this loan is no different than applying for your everyday conventional or FHA mortgage product. First, you will call Alex Carlucci at 800-900-8569 or send an email to alex@gustancho.com. Once you contact Mike, you will be paired with a licensed loan officer in your state. Your loan officer will send you an application link, which will allow them to start the process and pull your credit. You will send the following information:

• Last 30 Days of Pay Stubs
• Last Two Years Tax Returns
• Last Two Years W2 or 1099s
• Mortgage Statement
• Homeowners Insurance Policy
• Driver’s License

Once your loan officer is able to approve the documentation you have sent in, a full loan disclosure package will be sent to you.

Non-QM Mortgage Process

After you complete the electronic signatures and send back a few ink signed pages, your appraisal will be ordered. For any refinance loan, the appraisal is the most important part of the transaction, the appraisal will tell the lender the value of your property. We can go up to 85% of the appraised value of your property. While the appraisal is being completed, your file will be underwritten.

Underwriting Process on Non-QM Loans

The underwriter will tell you what items if any are needed to approve your refinance. Once the lender has received your appraisal, the title work, and the documentation requested from you, you will then close on your refinance. Since this loan program is only allowed on a primary residence, there is a three-day right to rescission. Before your refinance will fund. Once your loan is funded, everything is official, and your new loan is live.

Qualifying For Non-QM Mortgages With a Lender With No Overlays

GCA Forums Mortgage Group are always looking for new loan programs that can help our clients. This Cash-out refinance product came at the best time possible. FHA and VA have lowered their maximum loan to value thresholds. That additional 5% can help a struggling family pay off consumer debt. There are many reasons families complete a cash-out refinance. To discuss all your refinance options, please call Alex Carlucci at 800-900-8569. Text Alex for a faster response.  We are experts in mortgage refinancing.

Frequently Asked Questions on Cash-Out Mortgage Options With Non-QM Loans

Frequently Asked Questions (FAQs) about Cash-Out Mortgages Using Non-QM Loans

What Does the Non-QM Approach Mean For Mortgages?

This mortgage loan conforms to the requirements set forth by the Consumer Financial Protection Bureau for qualified QM loans. There is a clientele with the capacity to pay back a loan but who do not meet the requirements of a conventional lender, so these loans are ideal for such clients.

What Is a Cash-Out Refinance Using a Non-QM Loan?

Owing to the increasing rate of owners defaulting on a loan or seeking alternative credit solutions, the cash-out refinance process allows the owner to re-finance their existing loan amount and withdraw some equity in cash. Non-QM loans are perfect for self-employed, low-scoring credit investors who might not possess a traditional cash-out refinance.

What Type of Clientele Will Benefit From Using Non-QM Cash-Out Refinance?

In short, Non-QM cash-out refinance loans are very beneficial for:

• Self-Employed Borrowers: Always an investor and low ledger holder or someone who works for regions and reports using bank statements.
• Real estate investors: Most borrowers want to draw equity to purchase other properties.
• Credit-challenged individuals: Clients with a relatively low score and a high debt-to-income ratio or a history of some form of economic downturn, such as bankruptcy or foreclosure of the previous home.
• High net worth: Readily available assets without documented income.

What Are The Features Unique to Non-QM Cash-Out Mortgage Options?

• Less Stringent documentation: Verification of income through profit-loss statements, asset depletion, or even bank statements.
• LTV Ratios That Are Higher: Lenders are able to convert higher home equity ratios than traditional lenders, launching up to 85% for non-QM loans.
• Credit Score No Longer A Deal Breaker: A credit score is indeed important, but non-QM lenders may still tolerate a lower score provided there are some mitigating circumstances.
• Interest-Only Payments: A few of the Non-QM cash-out loans come with interest-only payment structure options.

What Factors Determine The Total Loan Amount in a Non-QM Cash-Out Refinance?

The amount of the loan is determined by a number of variables:

• Equity in Home: How much of the current value of your home versus developing mortgage debt do you have?
• LTV On Cash Withdrawal: Non-QM lenders have a tendency to offer higher ratios compared to other traditional loans, which makes them an appealing option, up to 85%.
• Credit Worthiness: Even though this part is forgiving, lenders will still consider credit and financial standing.

What Are The Requirements to Neet a Non-QM Cash-Out Refinance?

• Credit Score: None necessary. However, with a 620 or higher score, expectations would go over usual.
• Income Verification: At times, tax returns or W-2s are not required. Instead, rental income proof, bank statements, or asset-based documentation may be sufficient.
• Loan To Value Ratio: For cash-out refinances, most Non-QM lenders consider an LTV of between 75% and 85%.
• Type of Property: Varies from investment property, second house, and primary residential house.

Which properties are eligible for non-QM cash-out loans?

Non-QM lenders allow cash-out refinance against:

• A single-family home
• Plots occupied with town-homes and condos
• Multifamily properties (2 to 4 units)
• Multiple units for renting out

What is The Applicability of Cash Non-QM Cash Out Refinance Funds?

Funds acquired from cash-out can be employed in many ways, including:

• Merging unaffordable debts into one affordable debt
• Upgrading or improving on house
• Rightfully obtained real estate
• New business or expansion of an existing one
• Funds in case of emergency or other forms of need

What Amount of Interest is Charged in Non-QM Cash-Out Loan Units?

Non-QM loans get more expensive than regular loans as there is more risk for the lenders. Some of the reasons why the interest rate range varies according to.

• Extensions of loans in the future
• Results of constructing an asset from scratch
• Buying or building an industry
• Rate of Tolerance-LTV

What Differences Arise From Non-QM Cash-Out With Traditional Cash-Out Refinance Options?

• Limitations to Qualification Criteria– These are Non-QM loans, meaning that they are less strict for income-alone verification and credit history input needed.
• Cash Out Amount- Non-QM lenders might approve of a larger cash-out limit, particularly on investment-related properties.
• Rates of Interest- Non-QM Non-QM cash out loans Units do have a higher rate of interest that interfere with the belief of the unit.

Do Non-QM Cash-Out loans charge prepayment penalties?

While obtaining some Non-QM loans, borrowers are required to pay prepayment penalties especially when the loan involves investment properties. Lenders usually include the terms related to penalties in the agreements to be on the safe side.

What is the timeframe for finalizing the Non-QM Cash-Out Refinance?

Looking at an average, the time taken to close cash out refinance is around 2 to 4 weeks. However, this is solely dependent on the intricacy of the financial details and requirements set forth by the lender.

Are Non-QM Cash-Out Loans Available to Individuals Who Have Filed For Bankruptcy or Underwent a Foreclosure?

Non-QM loans tend to have fewer restrictions compared to other loans, which is why individuals with a not-so-good credit history tend to seek it out. Depending on the amount of equity and income some lenders can provide loans on a 1 to 2-year basis after the bankruptcy or foreclosure.

How does a Non-QM cash-out refinance validate users’ income?

Non-QM lenders have the provision of providing supplementary income by utilizing numerous methodologies such as:

• Bank Statements: Most commonly utilized to display 12 to 24 months’ worth of deposits.
• Asset-Based Documentation: Instead of showcasing employment, this uses capital to validate the individual.
• Profit-and-Loss Statements: As the name suggests, this is utilized by borrowers who are self-employed.

Do Real Estate Investors Have Specific Non-QM Cash-Out Loan Plans Tailored For Their Use?

In fact, Non-QM loans are able to satisfy the needs of real estate investors by providing the following assets: DSCR Loans: These loans are calculated based on the ratio of rental income in comparison to the amount of mortgage that needs to be paid.

No Evidence of Employment:

Rental cash flow alone can take a borrower through. High Loan to Value ratios: Equity can be harnessed liberally in order to finance additional business opportunities.

What Will Be The Disadvantages of Non-QM Cash-Out Refinance Loans?

• More Expenses: The terms and fees come with higher rates than what we are used to seeing with traditional loans.
• Reduced duration of a loan: There are some Non-QM loans which allow for a balloon payment or a time period that is considerably lower.
• Instability in rates: The downside to a lot of Non-QM loans is that the interest rates are not fixed, which means monthly payments may go up through the years.

Is it Possible to Refinance Against With Another Non-QM Cash-Out Refinance Loan?

It can be. If you already have a Non-QM loan and want to borrow against it again, you can do it provided you want better terms. But only do so if you have thought about closing costs and prepayment penalties.

Where Do I Go in Order to Get a Cash-Out Refinance Loan With a Non-QM Lender?

• Other kinds of lenders: Non-QMs are not as popular, therefore, try to find a specific lender.
• Broker: As the majority of brokers have a number of Non-QM lenders to reach out to.
• Internet: Accessing customer reviews of lenders will help to judge how reputable the lender is, as well as how happy customers are with the services.

How Extensive Is the Availability of Non-QM Cash-out Loans on American Soil?

Yes, the true position is that virtually all Non-QM lenders’ scope extends throughout the U.S. However the regulations of an individual state basis do determine or affect the extent to which requirements and terms can be met.

What Can I Do So That I Am Ready To Go To a Non-QM Cash-Out Refinance?

Prepare alternative income verification documents e.g. bank statements, rental income.

• Verify the correctness of your credit report.
• To estimate your home’s equity, check the latest market analysis or consider hiring an evaluator.
• Request various no-QM lenders for quotes in order to get the most preferable terms.

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