Daily Mortgage Rates LIVE - 09/17/2024 - Conventional "Affordable" Loans

In this episode of Daily Mortgage Rates LIVE!, we explore Conventional "Affordable" Loans and what they mean for today’s homebuyers. We’ll break down the key features of these loans, including eligibility criteria, benefits, and how they compare to other loan options. Discover how Conventional "Affordable" Loans can make homeownership more accessible and affordable, especially for first-time buyers and those looking to move into their next home.

Join us as we provide practical tips for navigating the application process and offer expert insights into current trends in affordable housing finance. Whether you're considering buying a home or just want to learn more about affordable financing options, this episode has you covered.

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For more episodes visit: https://themortgagecalculator.com/Page/Daily-Mortgage-Rates-LIVE-Video-Podcast

About The Mortgage Calculator:

The Mortgage Calculator is a licensed Mortgage Lender (NMLS #2377459) that specializes in using technology to enable borrowers to access Conventional, FHA, VA, and USDA Programs, as well as over 5,000 Non-QM mortgage loan programs using alternative income documentation! 

Using The Mortgage Calculator proprietary technology, borrowers can instantly price and quote thousands of mortgage loan programs in just a few clicks. The Mortgage Calculator technology also enables borrowers to instantly complete a full loan application and upload documents to our AI powered software to get qualified in just minutes!

Our team of over 350 licensed Mortgage Loan Originators can assist our customers with Conventional, FHA, VA and USDA mortgages as well as access thousands of mortgage programs using Alternative Income Documentation such as Bank Statement Mortgages, P&L Mortgages, Asset Based Mortgage Pr

Catch all the episodes of Daily Mortgage Rates LIVE at https://themortgagecalculator.com/Page/Daily-Mortgage-Rates-LIVE-Video-Podcast

Check out all episodes of Daily Mortgage Rates LIVE at https://themortgagecalculator.com/Page/Daily-Mortgage-Rates-LIVE-Video-Podcast

The Mortgage Calculator is a licensed Mortgage Lender (NMLS #2377459) that specializes in using technology to enable borrowers to access Conventional, FHA, VA and USDA Programs, as well as over 5,000 Non-QM mortgage loan programs using alternative income documentation! Non QM Loans include Bank Statement Mortgages, P&L Mortgages, Asset Based Mortgage Programs, No Ratio CDFI Loan Programs, DSCR Investor Mortgages, Commercial Mortgages, Fix and Flip Mortgages and thousands more!

To apply for a mortgage please visit our Quick Mortgage Quote Page at https://themortgagecalculator.com/Mortgage/QuickQuote

The Mortgage Calculator is a registered DBA of Mortgage Calculator Company LLC. NMLS ID #2377459. Programs and rates are subject to change without notice. Mortgage Calculator Company LLC is licensed in the following states that require specific licensing disclosures: AZ (#1040352), CA CFL (60DBO-171188), GA Georgia Residential Mortgage Licensee (#2377459), IL MB.6761755 Illinois Department of Financial and Professional Regulation, Division of Banking, 100 West Randolph, 9th Floor, Chicago, IL 60601 1-888-473-4858. Not licensed or conducting business in New York.

For more info visit https://themortgagecalculator.com...

Transcript

Restream recording Sep 17, 2024 • 03:03:48 PM: 0:09

All right. So welcome everyone. My name is Kyle Hiersche. I am the COO of the Mortgage Calculator joined here by our president Nick Hiersche and our CSO Jose Gonzalez. We are a lender that specializes in non QM loans. And what we do every weekday at 11 a. m. Eastern on this show is go through our live mortgage rates. Then we do a deep dive into a different loan type. And today's loan is going to be the different affordable quote unquote, affordable Uh, options for our conventional loan. So Jose will take us through that, but first let's go ahead and check out the rates. So Nick, if you're ready, let's pull up the rates for a few of the standard programs and take them. Right. So the rates are live for today. It is September 17th. Uh, all the rates are at a one year low still, and we still have some news coming today. So hopefully we see some more movement. We will compare all the programs and the standard APR for the initial rates today. If you'd like a full breakdown of all the itemized fees that go into the APR, a full loan estimate, please get with one of our team members. They'd be happy to send that over. For the demos today, we set a standard scenario. We'll set a single family home. We'll set a 500, 000 purchase, 400, 000 loan amount that corresponds to 80 percent loan, 20 percent down payment. Set an estimated 760 credit score and an estimated 40 percent debt to income ratio. So with those settings, let's check out the rates today. Pretty much the same as yesterday, but again, these are one year lows. So absolutely amazing. 30 year fixed conventional for primary, typically the most common option people think of when they think of a mortgage coming in today at 5. 625 rates. 5. 891 final APR there. And if for any reason our customer doesn't qualify for a conventional option, we typically want to present an FHA option. FHA allows more leniency on credit issues and a higher debt to income ratio, but does require upfront and yearly mortgage insurance. Rates come in for FHA at 4. 75. When you add in all the fees, including the mortgage insurance, final APR 5. 676. So if our customer qualifies for both, they may consider FHA if they want to pay the mortgage insurance. Our customers that need to use it, definitely a very good option. And our VA options for our eligible vets and active service members. If you are eligible, these programs are definitely amazing. Rates is AS 4.99. Finally pair with the standard funding fee here, 5.264. So notice if we compare across the programs, the VA is gonna be the best option for our eligible vets and service members at the lower a PR compared to the other options. So definitely take advantage. And the final standard option here that all the banks and lenders have access to, USDA, it's only for USDA eligible areas. That's the rural areas of the country. The property is eligible and our borrower is eligible. These are great options to consider for each as low as 4. 875, 5. 575 with the standard fees. So if our customer is comparing to an FHA, the USDA is going to be a touch cheaper, which is typical, and it's going to be a touch cheaper than conventional as well. So good option for borrowers looking in those areas. Thanks. And that rounds out the standard options that every bank or lender can access. But if our customer doesn't qualify, many banks or lenders have to deny them. But we have 5, 000 plus other options here, starting with our non QM AltDoc options for primary home. So if our borrower doesn't qualify using tax returns and the standard documents required for conventional and FHA, we need to switch to using alternative documents, such as bank statements, 1099s, P& Ls, asset related programs, all kinds of options. This option here is a bank statement option. Rates today come in at six percent flat. Final APR 6. 309. So we're within about a half a point, which is typical of the conventional option, about a half a point higher to switch to alt docs. So great option for our borrowers that need to use those alternative docs. It's not that much of a cost. And moving on here to our investment properties. First up is our alt doc options for investment properties. So bank statement or similar coming at 6. 5 rate final APR 6. 823. We'll compare that to our other investments. We do have conventional, but no F-H-A-V-A or USDA, uh, for the government programs, but conventional does have investment property options rates as low as 6.25. Finally, PR 6.581, and we'll compare that to our favorite programs. Our DSCR stands for debt service coverage ratio. No income needed from our borrower. No employment information needed from our borrower. Simply use the estimated rents to determine the DSCR ratio. The estimated rents can cover the estimated expenses, that's a DSCR ratio of 1 or higher, which is preferred. For this demo here, we put a ratio of 1. 5, so we can see all the programs pop up. The 3 year prepayment penalty option here is the standard option first, rates come in at 6. 25 today, same as conventional, and finally PR 6. 529, actually a touch cheaper there. And we can sweeten the deal with our five year prepayment penalty options. Rates come down to 5. 875. Absolutely smoking. Final APR 6. 181. Beating conventional by quite a bit there when we can add our five year prepay. And our final DSCR option is a no prepayment penalty option. Some states don't allow it and some people don't want it. No problem. Rates come in today 6. 5. Final APR 6. 823. So that's a touch higher than conventional, but I'd still say most investors would choose a DSCR loan and recommend most to add a prepayment penalty to drop the rates even further. And the final two options we'll go over real quick are 30 year fixed second mortgage options, great options for borrowers that still have a low rate first mortgage, lower than the rates we're looking at now, want to keep that first mortgage in place. But still need some cash out. They can access that cash out equity with a second mortgage instead of a HELOC at lower rates. So for a primary home, our second mortgages come in at 8.125, final a PR 8.527, which is lower than a HELOC and um, not variable like a heloc. And our investors can use the same options for a second mortgage, get that cash out rates as was 9.5. Finally, power 9.739. So those are the standard options we go over every day. Let me go ahead and. Get into today's topic. Jose is going to share some of the specialty options. So when we're doing our live demo, we have our basic, uh, super basic scenario. We don't get to click all the specialty options, uh, which when we're in the conventional quotes, there are some unique programs under the affordable label. So, uh, this is a specialty program. So Jose is going to list the rules, right? There's always going to be rules, but these programs do have some amazing pricing. So. Uh, we don't get to show that live, but Jose will show some smoking pricing here in a second. But first let's talk about how they can access this pricing here. Good morning, everybody. Thank you for joining us for daily mortgage rates live with the mortgage calculator. The affordable options that you see here are conventional loans offered by Fannie Mae and Freddie Mac are two GSEs for conventional loans. And what makes them affordable is that they offer reduced mortgages. interest rates and reduced mortgage insurance for borrowers that are at 80 percent or below the area median income for the census tract in which the property is located. Now there are, uh, uh, several exceptions to this, uh, maximum income restriction allowed. The exceptions are if the property is in a low to moderate income census tract. If the property is in a minority census tract or if the property is in a disaster area census tract, if it's any of those three options, then you would be able to originate the loan for that borrower without the 80 percent or below area median income restriction. And whether it's Fannie or Freddie, you can go either to the Fanny Geocoder for a MI or the Freddie Mac Geocoder for MAMI, which is area median income, plug in the property address and see, uh, if what the area median income is. And if it is in any of the three exception category areas so that you could eliminate the income restriction. Now, like I did mention, this program does have substantially lower interest rates, mortgage insurance, uh, and also 97 percent income. maximum to value. The other thing to consider is that you do not have to be a first time home buyer to purchase with this option. You just have to meet the income requirements unless it is one of the areas subject to an exception. So let me go ahead and share the options with you. That we have for today. First option is for a one unit property purchase 3 percent down. And if you've been looking at interest rates for conventional loans, you will note that these rates are absolutely smoking. You have 5. 875 with a lender credit. Of 0. 125 as our lowest cost option. And you have 5. 125 and a cost of 2. 5 points as our lowest rate option for our 97 percent LTB purchase here. And this one happens to be Fannie Mae home ready. Now we have another Fannie Mae home ready option, which is for a two to four unit property purchase still at 97 percent LTV. And you will note that there is not a loan level price adjustment for the two to four unit property. configuration. So again, same rates you just saw lowest cost option 5. 875 at a cost of 0. 125 lowest rate option 5. 125 at a cost of 2. 5 points. So now we share the renovation loan option. This one happens to be Freddie Mac's, uh, home possible. Choice renovation loan, uh, for a purchase, uh, with only three, again, only 3 percent down. Now, those of you that may not be aware of the renovation loans can be used when purchasing a property that either has condition related issues that would not allow it to close with a non renovation loan, or simply the borrower wants to update kitchens, bathrooms, windows, and whatever else they want to do to the property. As part of the purchase to make it their dream home. So you are looking at a little bit of a increase in the rate here, 6.625 at a cost of half a point. And you can buy that down all the way to 5.625 at a cost of 2.5 points. Uh, but certainly cheaper than using your credit cards, uh, to do, uh, these, these, uh, renovations after closing. Our next example here is for the, uh, rate and term refinance, right? This is now, please note that there are no, um, cash out refinances, uh, for this loan product. Rate and term is the only And you will note that 5. 875, again, same, uh, rate as the, uh, purchase. Is a lender credit at 0. 125 and your lowest rate option is 5. 125. So very, uh, good options here that are available. The last one I'm sharing with you is manufactured home, right? That can be a little challenging. Well, uh, great news is that this does offer a very, uh, competitive option, typically for manufactured homes, borrowers to tend to go to FHA, though, although do remember that FHA is a little bit more restrictive in property condition and requirements, including structural engineers, inspection reports required from the onset for manufactured home, uh, Versus the conventional loan and these are conventional loans, even though they are 3 percent affordable option. They're still considered conventional loans and they would not require any type of structural engineers inspection report unless the appraiser makes a note. of deficiencies in the foundation when they do the appraisal. So, uh, 6. 124 is our lowest cost option at par, and you can buy that down all the way to 5. 375 at a cost of 2. 25 points. So certainly look to the mortgage calculator for all your affordable QM, agency, and commercial. All right. Thank you, Jose. It looks like we have a couple questions that came in here, so we'll go ahead and Uh get to these questions here. We'll pull them up on the screen So first question is I bought my home last year in november with a va jumbo currently looking into doing a va earl What is the current rate for that? Type of loan at par. Uh, well, what we could do is help you out and get you a real quote with the information. If you go to themortgagecalculator. com or you could email support at themortgagecalculator. com as well. And we could have somebody give you an actual quote with all of your information, your actual, um, your data there, uh, but great rates right now and, uh, VA Earl, very quick and, uh, very easy. Okay, so next question. So if FHA denies due to property conditions, this would be a good one to use as the backup plan. Um, that was, I think, a couple examples ago. Yeah, that was probably referring to the renovation loan. Yes, absolutely. The renovation loan is the workaround for if you have a property with condition related items that will not allow you to close. Uh, you know, but we're talking about like, um, you know, vandalism, you know, missing air conditioning unit and other components missing kitchen cabinets. I mean, those are obviously glaring examples of condition related items, but it could be other things not as obvious, but certainly is devastating. Like, all of a sudden, you're told the property needs a new roof. Right? You can't get insurance. Your life expectancy of the roof is less than the minimum years threshold. What do you do now? Seller says, Hey, take it or leave it. You knew what you were getting into. That's why I gave you the price that I gave you. So at that point, you could pivot to the renovation loan, get your estimate for the roof repairs and then submit that and get everything approved that way. All right, looks like that's it for the questions. We do appreciate everybody tuning in definitely appreciate the questions Remember that we do this at 11 a. m Eastern every weekday where we go through our live rates and then do a deep dive into a different loan type So we will see you all tomorrow with a new loan type at 11 a. m Eastern for the next episode of daily rates live with the mortgage calculator