More creative loans for hard-to-qualify borrowers
By JEFF LAZERSON / CONTRIBUTING COLUMNIST
Last week I wrote about novel and new loan programs that I learned about at the annual Las Vegas mortgage brokers’ convention. In response, this week readers peppered me with clarifying questions, wondering about other opportunities. Therefore, we now have convention column part-two offering you more hot totties.
1) Buying a home non-contingent? But you still have to sell your current residence. Forget bridge loans (high rates and lots of points for short term lending, allowing you to pull money from your still unsold residence to complete your new purchase). Well qualified people in this predicament can keep their home listed and get a standard cash-out loan with no prepayment penalty.
2) Want to buy a home as your primary residence with a loan amount up to $625,500 but no job? No problem. Get a well-qualified non-occupant co-signor, put 10 percent down and have decent credit with standard pricing.
3) Want to buy a big boy property, perhaps along coastal O.C. or in Yorba Linda? Tax returns don’t show enough qualifying income? Just cough up 24 months of personal bank statements to calculate your qualifying income for loan amounts up to $3 million. A required minimum 700 middle FICO credit score and at least 20 percent down for a tax cheaters rate of 6.125 percent. And, no cash reserves.
4) From another country that is not on the Office of Foreign Assets Control sanctioned country of origin list? No social security number or ITIN number? No sweat if you are putting at least 30 percent down in U.S. denomination on an investment property. Just show your passport and get a loan up to $2 million at the hurt-me rate of 9.25 percent.
5) Have a bankruptcy on your record? If you are just one day out of bankruptcy and have at least a 560 middle FICO score and you are putting at least 20 percent down, you can borrow up to $1 million dollars in exchange for a rate of 9.125 percent.
6) Do you have a portfolio of single-family, condo and two-to-four-unit rentals? How about throwing them all into one loan and use the combined equity to calculate your loan-to-value? Your single loan rate is dependent on your total equity.
7) Can’t qualify for rental property loans based on your tax returns? Forget expensive hard money loans. Get a subject property cash flow loan by putting at least 25 percent down or having at least 25 percent equity when refinancing. A minimum 660 middle FICO score gets you a rate of 7.615 percent as long as your debt-to-income ratio is 90 percent or less (principal, interest, taxes, insurance and association divided by monthly gross market rents).
Housing is cyclical. Just be careful in this anything goes, never say no, new race to the bottom of the mortgage world. Make sure you have some backup money or a realistic property exit plan in the event of possible blindsiding occurrences (like property values drop or your cash flow is reduced).
Jeff Lazerson - Mortgage Columnist since 2011