Septembers Numbers Tell an Interesting Story

September's Numbers Tell an Interesting Story

Higher rates. Fewer rate locks. You know the drill.

But September’s data tells an interesting story.

According to Optimal Blue, Non-QM loans were a big part of the plot. These are borrowers whose financing needs may not fit traditional agency guidelines.

Non-QM loan lock volume rose 8%, accounting for 12% of total loan production in the month despite the benchmark 30-year conforming rate climbing to 7.39%. Investor loans represented roughly one-third of Non-QM activity, while bank statement loans accounted for another 30%.

Adjustable-rate mortgages (ARMs) also gained ground, reaching 14% of rate locks—the highest share in Optimal Blue’s data going back to 2019.

There are more financing solutions than a traditional 30-year fixed mortgage. In today’s market, understanding the alternatives can help uncover opportunities for buyers who might otherwise assume financing is out of reach.

Interest Only Loans

Here are three interest only borrower profiles to watch out for:

The Investor: Focused on cash flow, building reserves, and preserving capital for the next acquisition. DSCR loans, interest-only options, or other investor-focused financing may offer flexibility depending on the property and the borrower's goals.

The Self-Employed Borrower: Managing variable or seasonal income? Bank statement programs and other Non-QM options may provide an alternative when traditional income documentation doesn't tell the full story.

The High-Net-Worth Borrower: Prioritizing liquidity and keeping assets available for investments or other opportunities? Certain financing strategies may help borrowers preserve capital rather than liquidate investments for a purchase.

Adjustable-Rate Mortgages

For buyers who don't plan to keep a mortgage long term—or who prioritize a lower initial payment—an adjustable-rate mortgage may be worth exploring. ARMs have been pricing competitively with fixed-rate mortgages in recent market activity, although the difference varies by program and borrower.

The key is understanding the trade-off: an ARM's rate may adjust after its initial fixed period, so borrowers need to consider how long they expect to own the home or keep the loan, along with their ability to manage future payment changes.

Pricing Incentives

Some lenders are offering pricing incentives to brokers, creating opportunities for additional savings. When available, I'm passing those incentives along to my borrowers on a first-come, first-served basis.

The NEXA Advantage

My job isn't simply to find a mortgage that fits. It's to understand the borrower's financial picture, goals, and priorities—and then explore the financing strategies that make the most sense.

For your clients, that can mean more options. For you, it means having a lending partner who finds solutions.

Have a buyer who doesn't fit the traditional mold? Let's look at the options before ruling them out.