Hey LOs,
United Wholesale Mortgage announced last week that it's rolling out an interest-only jumbo loan. UWM appears to be the only wholesale lender that is offering an IO option.
The Pontiac-based lender said in a statement that the IO loan, which is a non-qualified mortgage product, will allow borrowers to make interest-only payments over the first 10 years of their 30-year mortgage, followed by a 20-year amortization period.
"This product is a great option for those who are looking for a low monthly payment, in addition to more flexibility and control over their investment," UWM said last week. "In many cases, borrowers can save hundreds of thousands of dollars in the first 10 years."
The move is a little bit unexpected for the wholesale lender, as the company's line for several years has been, "We don't do non-QM."
Lenders that have historically offered this product are non-QM lenders, such as Angel Oak, Acra Lending, and Carrington Mortgage. Average requirements by these non-QM lenders for an interest only loan is a credit score that ranges between 650 to 700, and a max loan-to-value ratio up to 90%.
UWM, in that regard, is playing it safe, requiring a borrower to have a credit score of at least 700, a debt-to-income (DTI) up to 43%, and the LTV up to 80%.
Tell me LOs, why do you think wholesale lenders are starting to jump into the non-QM space? Will this have an impact on non-QM lenders?
Email me anonymously at mvolkova@housingwire.com
Maria Volkova, Mortgage Reporter
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