Points are available on some non-QM loans. Non-QM loans (bank statement, DSCR, asset depletion, ITIN) typically have higher base rates than qualified mortgages, which means the dollar savings from points can be larger. However, not all non-QM lenders offer discount points.
Non-QM Loan Points
Non-QM loans (bank statement, DSCR, asset depletion, ITIN, etc.) typically have higher base rates than qualified mortgages. This means the dollar savings from points can be larger. However, not all non-QM lenders offer discount points. Check with your lender.
Rate Reduction Potential
On a DSCR loan at 8.5% for an investment property: one point might reduce the rate to 8.25%, saving about $52/month on a $300K loan. The higher starting rate means the savings are meaningful. Some non-QM lenders offer aggressive point pricing because the margins on these loans are wider.
Considerations
Non-QM borrowers often choose these loans because they cannot document income traditionally. These borrowers may have less cash available at closing, making points harder to justify. If you can afford the points and plan to hold the property long-term, points on a non-QM loan can generate significant savings.