Daily Mortgage Rates LIVE - 09/23/2024 - Asset Utilization Loans

In today's episode of Daily Mortgage Rates Live, we’re diving into a powerful and flexible financing tool—Asset Utilization Loans. If you're sitting on significant assets but lack the traditional income streams that banks typically look for, this episode is for you! We’ll break down how these innovative loans work, who qualifies, and why they could be a game-changer for entrepreneurs, retirees, and high-net-worth individuals. Whether you’re looking to purchase your dream home or refinance without the hassle of proving income, asset utilization could be the perfect fit. Tune in to discover how to leverage your wealth and unlock new opportunities in the mortgage world!

Don't miss this insightful conversation—it might just open doors to a smarter financial future!



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 Programs, No Ratio CDFI Loan Programs, DSCR Investor Mortgages

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 23, 2024 • 03:04:43 PM: 0:09

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 actual live mortgage rates for a few programs And then we do a deep dive into a different loan type Today's loan type is definitely an amazing non qm loan that we are very familiar with here at the mortgage calculator Which is asset utilization loan, so we'll get into that here shortly. But first let's go over our rates So nick if you're ready, we can go ahead and pull up the rates and see what they're looking like today. All right So, rates are looking good, still at one plus year low, so that's great. We will pull up all of our programs and compare the APR across our standard programs as our rates are live for today, September 23rd. Just after 11 a. m. Eastern, so all the standard programs have their initial rate sheets. If you'd like a full breakdown and itemized loan estimate that breaks down all the fees that go into the APR, Please get with one of our team members. They'd be happy to help you out. So, what we will compare today as we do every day is a basic scenario. We'll set up a single family home, 500, 000 purchase, 400, 000 loan amount. That corresponds to 80 percent loan to value, 20 percent down payment. Set an estimated 760 FICO credit score and an estimated 40 percent debt to income ratio. So with those settings, as we do every day, let's check out the live rates. So again, one and a half year lows roughly for all of these products. So absolutely amazing time to get out there and get going. Our first option, 30 year fixed conventional for a primary home, typically the most common option people think of when they think of a mortgage rates today coming in at 5. 625 final APR 5. 915. So great option again, one and a half year lows. Now, if there's any reason our customer doesn't qualify for a standard conventional option. Typically want to quote an FHA option as well. FHA allows more leniency on credit issues and a higher overall debt to income ratio, but does require upfront and yearly mortgage insurance. Rates today come in at 4. 75 with all of the fees and mortgage insurance, 5. 688 is the final APR. So if our customer qualifies for both, they may want to consider FHA if they're willing to do the mortgage insurance. And the customers that need to use FHA, definitely a very comparable option. And VA great option for eligible vets and active service members rates as low as 4. 99 final APR 5. 275 with a standard funding fee here. And notice the final APR definitely beats out FHA and conventional. So our eligible vets and active service members definitely take advantage of the VA program and moving on to the final standard option. USDA is only for properties in USDA eligible areas. That's the rural areas of the country. The property is eligible and our borrowers are eligible. These are great options to consider. USDA comes in today, 4. 875. Finally, standard fees, 5. 598. So if our customers shopping in these USDA areas and comparing to FHA, it's going to be a touch cheaper and also a touch cheaper than conventional. So great option in those rural areas. And that rounds out the standard options and any banker lender has. And unfortunately, if our customer doesn't qualify, many banks will have to deny them. But we have 5, 000 additional options. Starting with our 30 year fixed non QM alt doc options for a primary home. So if our customer doesn't qualify with conventional documents, uh, two years of tax returns, etc., we can switch to alternative docs by switching to this program, using bank statements, 1099s, asset related, which is our topic for today. P& L is all kinds of different options. Rates today are at 6 percent for a bank statement option, the most common option. Final APR, 6. 309. So notice we're within, uh, we're within 0. 4 today, usually within about 0. 5 of conventional to switch to using AltDoc. So great option for our customers that need a little extra help there. We can still get them the home they really want. And going to investment properties. First up, our non QM AltDoc for investments, again, bank statement or similar. Let me get a 6. 375, final APR 6. 694, and we'll compare that to our other investment options. Remember, there are no government programs, so no USDA, FHA, or VA, but we do have conventional for investment properties. Conventional coming in 6. 125 rate today, final IPR 6. 452, and notice that's a touch cheaper than AltDoc, which is typical, and also a touch cheaper than our favorite program, DSCR, with a three year prepay. DSCR stands for Debt Service Coverage Ratio. No income needed, no employment information needed, only use the estimated rents from the appraisal to determine the estimated DSCR ratio. If the estimated rents can cover the estimated expenses, that's a ratio of 1. 0 or higher, which is preferred. And this option has a 3 year prepay, which is the most common, coming in today at 6. 25, finally up here at 6. 553, just a touch above conventional. We were beating conventional for quite a bit with our 3 year option, but right now it's about even. But we can sweeten the deal with our 5 year option. Some of our DSCR programs allow a 5 year prepayment penalty. Which beats conventional. Absolutely. Amazing. Raise as low as 5. 875. Find like our 6. 193. Absolutely amazing. And we do have a no prepayment penalty option. Some states don't allow it and some customers don't want it. That's not a problem. With no prepayment, DSCR comes in at 6. 375. Finally, PR 6. 694. So again, a touch above conventional, but most investors prefer a DSCR. And if they can add a prepayment penalty and definitely sweeten the deal a little bit, adding that prepay and our final two options, we always go over our most popular alternative second mortgage product, our 30 year fixed second mortgage, these are non QM products that are alternatives to a HELOC, which is typically the option for our customers that want to keep their first mortgage and still get some access to cash. Now we can do our 30 year fixed second mortgages for a primary home. Rates as low as 8. 125, which is a lower rate than a HELOC and fixed. And final APR comes out to 8. 527 to get cash out of a primary home without having to touch that first mortgage. And we can use the same programs for investment properties. HELOCs are very rare for investment properties, so these are great options. Rates as low as 9. 25 to get cash out of an investment property without touching the first mortgage. Finally, PR 9. 542. And these second mortgage programs are non QM. So we can use bank statements, 1099s, PNLs. And similar to our topic for today, switch the screen here, which is asset utilization, a very cool subset of non QM. Remember when we pull up the non QM, we typically go over the most common option, which is a bank statement. But we have tons of flexibility, thousands of different options and programs and variations. Asset utilization being one of them. Uh, Jose, let's talk a little bit about what this is in general and why we would do this as opposed to a bank statement or the more common non QM options that we show every day. And then let's check out some live rates for these programs. Yeah, like Kyle was mentioning earlier in the program, this is definitely a mind blower program because this program actually lets you use assets, liquid funds you may have in a checking account, savings account, 401k, Robinhood account, retirement, IRA, anything that can be converted to cash, liquid, or even like the 401k semi liquid can be used to qualify the borrower. Now, there are a multitude of different guidelines for this, so I can't really tell you what the exact formula is. because each investor will have their own income calculations. But the important thing to note, the assets do not have to be pledged. You only have to have, uh, own them, uh, in your possession a certain amount of time. Again, that's going to vary. That's called seasoning of the asset. Uh, so you do have to hold it a certain amount of time so that the asset can be considered. And that's simply it. It's going to be the, the total value of the asset portfolio. Is going to be divided by the number of months for that particular investor. And that is how they will calculate the income. It is a very amazing program. Uh, back, uh, we used to have these options, uh, that are available from like large brokerage houses where you're actually pledging the stocks and bonds and the other financial instruments. In this case, uh, you're not pledging anything. You're just providing the statements. So let's get right into it here with our asset utilization options for both primary and investment properties. As with all non QM, uh, the maximum LTV for all non QM is 90 percent LTV. And in this particular scenario, we are able to attain 90 percent LTV for a primary purchase, uh, So here you're looking at 8. 5 percent lowest cost option at three quarters of a point, and you can buy that down all the way to 7. 49 percent at a cost of 2. 5 points for asset utilization primary purchase with 10 percent down. Now our asset utilization investment purchase with only 15 percent down and look at those rates, right? 7. 99 lowest cost option, three quarters of a point. You can buy that down all the way to 6. 875 at a cost of 3. 25 points for our investment asset utilization, 85 percent LTV. And now for our low credit score borrower, we are looking here, 600 credit score being the minimum that we have for this product, 20 percent down being the minimum down payment as well. And it is 11. 125 lowest cost option. And you can buy that down all the way to 9. 499. And in this case, this happens to be for an investment purchase. And now for some cash out options, last two options here are cash out. Here is our asset utilization, primary cash out maximum at loan to value is 80%. But do notice as we lower the LTV, look at the cost on those rates. 7. 625 is at par and you can buy that down all the way to 6. 5 percent at a cost of 2. 375 points. And our last option here is our asset utilization investment property cash out also amazingly 80 percent LTV and we are looking at 8. 124 being our lowest cost option at par and you can buy that down all the way to 6. 874. At a cost of 3. 5 points. So some incredible options this morning for asset utilization loans. So do look to the mortgage calculator for all your outside the box. Loan solutions. All right. Looks like we have some questions here. So that's good. Let's start pulling up the questions here. And if you have any more, you can drop them in the chat there. We'll pull up the first question. First question is, can we do construction loans using our land as collateral and DSCR? Well, um, not exactly, but I will state the following. If this is an investment. Construction loan, right? For a spec home. It never uses the personal income of the borrower. If we're using a true ground up construction option, that is simply going to use the profit on the deal. So no need to have to worry about going DSCR if it's an investment property that is getting built with construction loan and you're using a true ground up construction. Bridge loan. The only time when income is going to come into play for a construction loan is if it's a primary or second home and you're using one of the one time closed construction loan options. All right. Next question is, do we do SBA loans here at the Mortgage Calculator? We absolutely do. Make sure you tune in. I know we recently had a show and we'll have one again in the, in the not too far future. Uh, we do offer SBA loans that have real estate and SBA loans that don't have real estate where they're just buying the business opportunity. Uh, a lot of people don't think that that's possible, but absolutely we can do SBA loans with and without real estate. All right. Next question is, does age play a factor with the 401k when utilized as an asset due to taxes and fees of early withdrawal? Great question. Uh, well, I mean, if we're talking about age of the borrower, no, I mean, you can't discriminate based on age of the borrower. Uh, and now maybe we're talking age of the assets, like seasoning of the assets. You usually have to. So, you have those assets, uh, a certain number of months before they can be used, uh, and counted towards, uh, income calculations. But if there is a penalty on withdrawal, that's taken into account, correct? That's yes, you you do have, you do have to provide the terms and conditions of withdrawal. What's going to happen is that usually for the asset type, there will be uh certain haircuts like we like calling them. So, for an asset that has less liquidity. Like a 401k, it's not going to be counted at a hundred percent. It's going to be given a haircut and that's how they're going to deal with the reduced liquidity. All right, looks like that's it, but thank you for the questions. Definitely appreciate it and amazing program here. Let's go ahead and wrap it up then. Remember that we do this show 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'll have a new loan type for you tomorrow. We'll see you all tomorrow, 11 a. m. Eastern for the next episode of daily rates live with the mortgage calculator. Have a great day, everyone.