Archive for the ‘Non Prime Mortgages’ Category

Mortgage Pre Approval No Credit Check

Everybody has their own opinion as to how a credit inquiry will affect their credit score. Me too. Wouldn’t it be nice get a good idea as to what you qualify for before your broker pulls your credit?

We can pre approve applicants via this loan scenario criteria via this pre qualification form: Loan purpose; Loan amount; Amount of cash needed; Subject property market value; State of subject property; Subject property zip code; Property type; Occupancy type, Credit information such as: bankruptcy; foreclosure; short sale; loan modification; Credit scores; Employment type; Anticipated income documentation type; (yes, our borrowers almost always know this before they find us) Liquid assets.

For example:

We have a borrower in Virginia that has been self employed for less than 2 years and has almost no money going through his bank accounts. He needed cash out ASAP because he was putting all of his liquid reserves into his business. In an effort to stop the bleeding, he needed a cash out refinance but had no way to document his income or document 2 years employment history. However, he is rock solid in every other area.

We were able to pre approve him based on the following information he submitted via our pre qualification form, which by the way, does not require a social security number or a credit pull:

Loan purpose: cash out refinance; Loan Amount: $800,000; Amount of cash needed: $800,000; Subject property market value: $1,700,000; State of subject property: Virginia; Subject property zip code 22901; (good to have but not exactly necessary) Property type: single family residence; Occupancy type: owner occupied; Bankruptcy: no; Foreclosure: no; Short sale: no; Loan modification: no; Credit score: 800; Employment type: self employed; Anticipated income documentation type: no doc; Liquid assets: $2,100,000. There is also a comments field for any additional information the borrower feels we should know. Here are his:

Your Message: Subject home was purchased for cash of $1,500,000 in Dec 2014. Additional $700,000 in improvements recently completed. No outstanding loans. Looking for easy/no doc type loan as I have recently started a new business (in Europe) and am not yet taking income out of the business. Bottom line – Looking to use my excellent credit scores, unblemished credit history and low LTV on primary residence for an easy, no doc loan.

Here are the results we produced, 4 loan options, all asset based, three Asset Depletion loan programs and one asset based program, again, without checking his credit. These are the email notes from our wholesale representative:

Pricing with a 700 score:

1. Pricing on non prime asset depletion, 500K would be 5.125% on a 7 year fixed with no prepayment penalty. We would have to do the asset depletion calculation (take assets and divide by 84 and use for income). So, in your case:

50% of the IRA can be used (example if 1 million, use 500K)

100% of savings can be used, so 400K

Total assets for asset depletion is 900K divided by 84 = 10,714 you can use for income

2. On the prime asset depletion, the max debt ratio is 43% and you need 6 months reserves (cannot use the cash out as part of the income calculation).

3. Non Prime asset based = same as above but you can go to a 50% debt ratio and there are no reserves required. That pricing would be 5.875% on a 7 year fixed and no prepay.

4. Non Prime ATR (ability to repay) (Dodd-Frank rule) in full. We take the usable liquid assets and will lend to that amount!! So, in my previous example, we could lend up to 900K. The pricing on that would be (up to 50% LTV) 5.875 +.50 for the ATR in full pricing add on = 6.375%.

He chose option 4. No debt ratios, easy peezy, lemon squeezy.


Why is all of this important? Why is this good? Because we like it and far more importantly, our borrowers like it even more.