Archive for the ‘Unconventional 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.

Funded Loan Scenario Bank Statement Loan

This is a pretty cool loan scenario that we recently funded. Thank the lenders that are for unconventional mortgage loan programs.

Bank Statement Loans for Good Borrower

So he is a self employed borrower that wanted to buy a second home/vacation home in St. George Utah but didn’t want to produce his tax returns. I didn’t ask him why, but I’m assumed it was because he knew it didn’t show enough income to produce an acceptable debt to income ratio. Our typical client borrower is proactive and knows what he or she wants and what their particular issue is. Like all self employed borrowers, he writes any and all business expenses off and therefore had an adjusted gross income that was way too low to qualify for a conventional loan program. He was frustrated because he was recently declined through a mortgage broker that only had traditional lenders with traditional loan programs. Shame shame. I feel sorry for borrowers like this and for average Loan Officers that decline perfectly good borrowers. This guy is rock solid in every qualifying way and deserves to buy a home, he just simply needed and alternative income documentation loan. He said he needed an unconventional mortgage because he was self employed and couldn’t use his tax returns to qualify. Inside of a 15 minute conversation with this guy, I knew we could help him. He knew the answers to all of my questions and had already picked out a home and was in contract.

Self Employed People Deserve to Buy a Home, Too

Like most of our clients, he knew he was a worthy borrower and chose not take “no” as an acceptable answer, so he went online and found us.  He owns a window installation company and he employs 18 people.  Most of our clients are very intelligent and proactive people. He joked that the people he employs have no problem qualifying for a mortgage and at the same time, the person that employs them did not. In 2013, he grossed $2,000,000 and $1,500,000 in 2014 and had already grossed $800,000 here in 2015. I assigned him to a Loan Officer that I knew could fund his loan.

He had all of his documents in line and had his secretary fax and email to me the same day. Every time I emailed or called him, he got back to in a very timely fashion. The guy is a pro and it was certainly a pleasure to work with him. His unconventional income documentation loan funded in 28 days and he is now making memories with his family in his new vacation home.

Unconventional Residential and Commercial Real Estate Financing – East Coast

Introducing a new private hard money real estate loan for Maryland, District of Columbia and Virginia. Manual underwriting for extra flexibility.

This is an equity based loan program that does not require purchase seasoning in order to utilize current “market value” and allows for up to 70% financing. The credit requirements are very flexible; foreclosures, REO’s, short sales, bankruptcies, no problem and income requirements are very loose; No Doc and Limited Doc available  This is good for either residential or commercial properties and construction loans, 100% acquisition / construction financing available. Interest only terms available, as well.

Get a hard money loan working hard for you.

For more information, call 858-222-7534 or feel free to fill out this Pre Qualification Form – no credit check required.

Cheers and happy holidays! Team.

Loan Program – Unconventional Investment Property Loan

Attention Real Estate Investors!

This loan program is unconventional for a number of reasons.

First, it allows for up to 80% financing with a high debt ratio up to 55% on a purchase loan or a rate/term refinance for single family residences, condos and rural properties to 4 units properties. $800,000 maximum loan amount for this unconventional loan program. This loan program also offers both ARM, 1, 3, 5 and 10 year terms as well 15, 20 and 30 year fixed interest rates and interest only terms, as well. Also, this lender never requires mortgage insurance.

This is great program considering the tight guidelines we are all facing in this current market so to have a program like this for investment properties is very helpful.

Call us with any question – 858-222-7534. Team.

Unconventional Jumbo Loans

Hello vacation home buyers!

We can now do vacation homes to 80% financing. This can be a single family residence or condo. This program is good for all 50 states. Cash Out available on the unconventional refinance loan program to $1,000,000. Both fixed and Adjustable rates available.

Unconventional jumbo loans are hard to come by these days. Give us a call with any questions you may have or

Pre Qualification Form – no credit check required. Team.

Looking For Cash-Out Options? You Don’t Have to Look Any Further!

This portfolio lender is a division of the 3rd largest commercial bank in this United States. Fortunately, we have a broker relationship with their wholesale department. We receive A+ service and support – in other words, they want to work with us in an effort to close your loan quickly.  This will allow you to obtain a 2nd mortgage up to 80% of the value of your home with a 650 or greater credit score to a maximum loan amount of $350,000.

This can be a HELOC (Home Equity Line Of Credit) or a fixed rate fully amortized loan. If you opt for a HELOC at first, you can change it to a fixed rate after the loan closes. We have a no point option, too.

Terms are available from 5 to 20 Years.

Credit approval to closing docs turn times are: full lender credit approvals are 2 to 4 days, underwriting approvals are 4 to 5 days, appraisal review is 3 to 5 days and if there are any additional conditions at that point, 4 to 5 days and closing docs, 2 to 4 days. So, application to closing table, we can close in under 2 weeks total. That’s service folks!

Because we are an information resource, you can see the guidelines for this loan program and other current lender niches.

Unconventional Lending and the Subprime Loans Crisis

I get asked on almost a daily basis what exactly unconventional lending means. Many people have never heard of an unconventional mortgage or an unconventional loan. Basically, most of these types of loans fall under the category of subprime loans.

Normally, loans are offered at the prevailing interest rate of the time when the borrower is approved for such a loan. However, for whatever reason many borrowers do not meet the credit score requirements for a certain loan amount at a certain interest rate. But that person may be very interested in obtaining a loan of that amount, whether it be for a new house or a new business venture. Unconventional lending offers them the potential ability to acquire such a loan amount at a higher then prime interest rate. This is known as a subprime loan.

Subprime loans are generally only available during strong economic periods. This is exactly what we witnessed a few years ago. Unfortunately, when the economy rapidly weakened, the subprime lending market dried up, and all the variable interest rates were jacked up. Most homeowners who took out a subprime loan are not able to refinance until their credit is a little stronger. As such, many people are now stuck with an interest rate which is spiraling out of control.

Subprime loans are the first type of financing to dry up when the market collapses. This makes perfect sense; when the economy is good, unemployment is down and people are being paid more, they are less likely to default on their debt. When the opposite is the case, people with lower credit scores become much riskier investments.

So, unconventional lending can be a very neat tool for getting someone into a home who is a slightly riskier investment for a lender. But when things go sour, the funding dries up and subprime loans can be very difficult to obtain.

Reasons You Have a Bad Credit Score

We recently made an addition to our site which lists the top eight reasons why your credit score may not be where you want it to be. For better or for worse, our credit score and our credit report are more or less the sole determinants of whether or not we will be able to make the important purchases in our life. As such, it would behoove you to learn as much as you can about the factors that go in to determining your credit score, and do as much as you can to keep it as high as possible.

Check out our new addition, the top eight reasons why you have a bad credit score; and while you’re at it, browse the rest of our credit education section which is currently being updated and revamped.

Unconventional Mortgages: Time Machine

This one is interesting. Don’t ask how, but I stumbled upon an article written in 2005 about the uncertainty in the housing market. At that time, the market was still in the bubble, and homeownership was at an all time high. However, it remarked on the irony that housing prices were appreciating so much that new homebuyers were having trouble breaking into the market, despite the overall high percentage of homeownership.

The article went on to explain that, because of this, more and more buyers were resorting to unconventional mortgage loans as a means to acquire the financing necessary to purchase their new home. It then went on to remark that these unconventional mortgages make the buyers susceptible to an entirely new category of risks. Now, these are not the unconventional mortgage loans of the sort that supplies. The article is talking about loans that allow homeowners to skip mortgage payments, and that sort of deal.

The Federal Reserve commented on this increase in unconventional loans, stating that they can be useful in allowing homebuyers to acquire property that they wouldn’t otherwise be able to get their hands on. But, the Reserve went on to say that these instances of creative financing are also luring buyers into homes that would otherwise, and should otherwise, be out of their reach. Governor Mark Olson went on to say: “When the payments on these novel mortgages adjust upward, the homebuyer may not be able to refinance such mortgages unless the home has increased in value.”

Truer words have never been spoken. We would be wise to heed the words of the forward-thinking, even when the market seems invincible. Hope this has been an interesting trip back in the time machine.

Mortgage Backed Securities Offer Hope?

First of all, what is a Mortgage Backed Security (MBS)? An MBS is a security which is backed by assets. The cash flow is backed by principal and interest payments of the underlying mortgage loans; and many feel that this is where the hope lies for pulling out of this recession.

Mortgage backed securities developed something of a bad reputation when many of them consisted of subprime loans, which were often provided to homebuyers with unstable financial situations. However, this new round of MBS are not being stuffed full of subprime loans; those who were guilty of this in the first place on Wall Street are long gone.

In today’s world, mortgage backed securities are dominated by government-backed entities such as Freddie Mac and Fannie Mae. These “Agency MBS” as they are called, don’t deal with subprime loans and subsequently aren’t as volatile. Not that they are perfect. They will typically be called in long before refinancing, even MBS that mature at thirty years.

But overall the trend looks good. Bonds backed by mortgages are still relatively cheap, and investors are no longer as afraid of them as they were initially. In fact, the spreads seem to be pointed back in the direction they were originally, before this horrid recession. Many optomistic economists are claiming that this means the economic downturn may be making an about-face. Only time will tell.

Securing a Bad Credit Personal Loan

You will almost always be required to fill out an application when applying for a bad credit loan. This application will generally require your full name, social security number, some information about your income, and perhaps some other relevant information about your financials.

The application is a necessity because a personal bad credit loan is unsecured, as opposed to car loan or home loan. This means that you are not putting up any collateral in exchange for the borrowed money. So the bank (or other lending source) sees this as a riskier investment, and rightfully so.

For the same reasons, your loan amount on a bad credit personal loan will typically be restricted to somewhere around $2,000 or less, depending on your credit score and credit report (although sometimes you may be able to get around having to have a credit check). You can lower your monthly payments by spreading the loan period out or borrowing smaller amounts of cash. This will make your loan more likely to be approved.

Only take out a bad credit personal loan if you are sure that you will be able to handle the monthly payments and you will easily be able to pay it back in the near future. These loans can be great to see you through a sticky situation, but make sure its just a temporary situation, or the bad credit loan will simply postpone and exacerbate the situation.

Help with Unconventional Mortgages

Today, I found someone who has a unique situation. He lives in a beautiful house, has fantastic credit, and wants to borrow $90,000 with his house as collateral. But he can’t get a mortgage because he lives in a nudist community. This is not the typical situation we deal with at, but we are certainly positioned to help the guy. But this definately brings new meaning to the term “Unconventional Mortgages”