Non-QM specialist to launch “pioneering” loan program

Maddux explained that the aim had been to help those borrowers who could not tap into equity because they were locked into a 30-year fixed rate loan.

They would now be able to tap into that equity and use it for debt consolidation, for home improvements, such as adding a second ADU (accessory dwelling unit) to obtain rents on their property, or for injecting cash into their business, Maddux suggested.

Asked why Fundloans had decided to launch the product now, he said it made sense to have such a loan program in the current market with rapidly fluctuating interest rates.

“There wasn’t a need for it before simply because someone would just do a whole new refi and rates were low enough where it made more sense to just have one mortgage at a low rate,” he said.

“Now rates have at least doubled in non-QM and are maybe even higher. If you had a 3.5% non-QM first mortgage, that same loan is 7% or 7.5%, potentially. Why would you want to give up that 3.5% if you have it locked in with that low payment just to access your equity? All the debt now is going to be 7.5% whereas you could just leave your first mortgage alone and then add on a second to get you that cash-out.”