Daily Mortgage Rates LIVE - 09/25/2024 - 1099 Loans

If you’re an independent contractor, freelancer, or self-employed and receive a 1099 instead of a W-2, you know the struggle of securing a mortgage without traditional income documentation. In this episode of Daily Mortgage Rates Live, we’re unpacking 1099 Loans, a flexible solution designed specifically for those who don’t have a conventional paycheck. We’ll discuss how lenders evaluate your income based on your 1099 forms, tax returns, or even bank statements, making it possible to get the home loan you need without the hassle of traditional underwriting.

Whether you're a gig worker, consultant, or self-starter, this episode is your guide to navigating the mortgage world on your terms. Tune in to learn how to turn your 1099 into the key to homeownership!


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, Commerci

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 25, 2024 • 03:04:52 PM: 0:09

Welcome everyone. My name is Kyle Hiersche. I'm 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. Then we do a deep dive into a different loan type and today's loan type is something we're very familiar with here because we specialize in non QM loans which is 1099. So Jose will take us through a deep dive into that but first We'll check out our rates. So Nick, if you're ready, let's go ahead and pull up today's rates and see what they are looking like. Right. Not much has, uh, changed. It looks like, but that's good because we're still at one and a half year lows here, we will compare all of our standard programs for today, September 25th. It's just after 11 a. m. Eastern. So all our initial rate sheets are live for our programs here. And we will compare the APR. If you'd like a full breakdown, an itemized loan estimate has all the fees that go into the APR. Please get with our team members. We have over 300 loan officers that would be happy to help you out. For the demo, as we do every day, we'll set up a standard scenario so we can compare all the programs. We'll set up a single family home, set up a 500, 000 purchase, 400, 000 loan amount that corresponds to 80 percent loan, 20 percent down payment. And we use an estimated credit score of 760 and an estimated debt to income ratio of 40%. So with those settings, let's check out the rates today. Oops, showing a little too much there. So first up for today is our 30 year fixed conventional for primary home. It's typically the first option most people think of when they think of a mortgage. Rates today coming in at 5. 625, final APR 5. 927, and if for any reason our customer doesn't qualify for a conventional option, we typically want to quote an FHA option, FHA allows more integrity on credit issues, as well as a much higher overall debt to income ratio. But does require a front end yearly mortgage insurance. FHA comes in today, 4. 875 with all the fees and mortgage insurance. APR comes in 5. 829. So a touch cheaper than conventional. If our customer qualifies for both and if our customer needs to use FHA, definitely a great option. And our VA is only for eligible vets and active service members. If you are eligible, these programs are amazing rates as low as 5. 125 today. Final APR with a standard funding fee 5. 379. So when we're comparing across the other alternative programs, the VA is always going to be the best for our eligible borrowers. So definitely take advantage. And our final standard program, USDA is only for USDA eligible areas. That's the rural areas of the country. The property is eligible. The borrower's eligible. These are great options to look at. 4. 99 rate final APR with all the fees. It's 5. 705. So if our customer is comparing that to an FHA, USDA is going to be a touch cheaper and a touch cheaper than conventional as well. So great option in those rural areas. Now those are the standard options that any bank or lender has, but if our customer doesn't qualify, many banks or lenders don't have other options. That's where we step in with our 5, 000 additional programs. First up, our non QM Altdoc for primary home. And if our customer doesn't qualify using conventional docs such as two years tax return typical documentation needs to use alternatives We can switch here. We can use bank statements 1099s asset related P& Ls all kinds of different options rates today for bank statement lowest 6 percent finally PR 6. 2 9 7 very close to conventional. We're within about 0. 3 today, which is pretty amazing Usually within about 0. 5 of conventional, but uh, just to switch to alternative docs, very comparable price there. And for our investors that need to use alternative docs, we have tons of options. So first up here is our non QM alt doc option. So again, bank statement or similar, coming in at 6. 5 rate, final APR 6. 823. And we'll compare that to our other investment property options. First off, our conventional option. We don't have any government options for investments, so no USDA, FHA, or VA, but conventional comes in today, 6. 25 rate, finally got a 6. 581, which beats non QM, Alt Doc, which is typical, but doesn't quite beat our favorite program coming in smoking today, DSCR, dropped quite a bit from yesterday, coming in today with a three year prepayment penalty, DSCR stands for debt service coverage ratio, no income information needed, no employment information needed. We simply use the estimated rents from the appraisal to determine a DSCR ratio that rents from the appraisal can cover the estimated expenses. That's a ratio of one or higher, AKA the property cash flows. That's what is preferred. So this option with a three year prepay comes in today 6. 125, quite a big difference from yesterday. Final APR 6. 450, beating conventional again, amazing. And we can sweeten the deal with a five-year prepay Some of our programs allow comes in today at a smoke in 5.875 rate for DSCR with five-year prepay final A PR 6.169. Again being conventional amazing and our no prepayment penalty option about the same as it was before. Rates come in today at 6.5 final A PR 6.823 for our states that don't allow it and our investors that don't want it, it's a touch higher than conventional, but always preferred for our investors. To use a DSCR loan, especially when the cost is very comparable and the final two options We always go over very popular products 30 year fixed second mortgages as an alternative to a HELOC which is typically the only way to get a Second mortgage to get cash out and not touch the first mortgage But these products are amazing for a primary home comes in today 8. 125 Final APR 8. 527 to get cash out of a primary home without touching that first mortgage You And these are non QM programs, so we can use bank statements and similar. And for an investment property, get cash out without touching that first mortgage with a fixed rate second mortgage, much lower than a HELOC, coming in today at 9. 25. Probably be our 9. 542 to get that cash out for our investors. Now let's go ahead and switch in today's topic. So when we do our non QM AltDoc demo, again, bank statements always the typical option. That's the most common option and typically the lowest priced option. But as we went over yesterday, we have BNLs, we have all kinds of different variations, and today's variation is 1099. Pretty straightforward, but Jose, let's talk about why we would use 1099 as opposed to the standard bank statement option. And then let's actually check out some examples since we do the live demo, we don't get to actually check out the 1099 specific option. Sure. Good morning, everybody. Thank you for joining us for Daily Mortgage Race Live with the Mortgage Calculator. Uh, 1099 and Bank Statement, uh, income streams are both for self employed borrowers. The main difference is that the 1099 loan allows us to use 90%. of the face value of the 1099. Only a 10 percent expense factor automatically worked into the system. Whereas bank statements, uh, the, the expense factor can be anywhere from, uh, you know, 20 percent to, you know, 50 or 60 percent depending on the income type. So, uh, you're definitely going to always get a larger percentage of the income from the 1099 than you will from the bank statement. However, the borrower actually has to receive a 1099 and be aware that there may be situations 1099s ought to come from one company and others may allow it to be from different companies. So do look into that. So let's get right into our, uh, options for this morning. First option is for a 10 99 primary purchase. As always, 10%, uh, 90%, excuse me, or 10% is the minimum down payment, 90% maximum LTV for any, uh, non Q1 product. And in this scenario here, 8.5% is our lowest cost option at a cost of seven, uh, 0.75. And 7.625 is our lowest rate option at a cost of 2.375. That is for our primary purchase with only 10% down. Now our investment purchase, minimum down payment is 15%, 85% LTV, which is pretty amazing for an investment property when we're using 10 90 nines. To qualify the borrower, 8.749 is our lowest cost option at par. And you can buy this down all the way to 7. 249 percent at a cost of 3. 375 points. And then for our low credit score borrowers, 600 is the minimum credit score for this product, 1099 product. 80 percent LTV is the maximum LTV when you are at a 600 credit score. 10. 875 is our lowest cost option at par. and you can buy that down all the way to 9. 75 at a cost of 2. 375 points. So now for our primary cash out, uh, 80 percent LTV is the maximum for a cash out using 1099s. For primary 7. 75, lowest cost option at par. And you can buy that down to 6. 375 at a cost of 2. 375 points. And for our investment property cash out, great news, 80 percent LTV is also the maximum LTV, 7. 749 at par. And you can buy that all the way to 6. 624 at a cost of 3. 25 points. And our last option is our low credit score cash out refi. Great news 75 percent LTV cash out is possible using 1099s with a 600 credit score. 11. 125 is our lowest cost option costing 0. 25 points. And you can buy that down all the way to 10. 125 costing. 2. 375 points. So look to the mortgage calculator for all your 1099 and non QM and agency loan options. All right. Oh, it looks like we do have a question that just came in. Feel free to drop any questions there. First question is how many years 1099 is required for the 90 percent LTV primary purchase? Well, that's a very good question. And the answer to that question would depend on what they were doing before they became. Self employed borrower with a 1099 if they were in the same field like if they were a doctor Working as an employee for a hospital and now they decided to go the 1099 route as long as you had 12 months of 1099, you'd be okay. You could document the 1099 income for the last 12 months. That's going to be the same if you were in a previous position doing the similar job, especially if you had a license for it. Like if you were an electrician and now you're a self employed electrician. Maybe you're an electrician with a license working for a company, now you're doing it on your own. Again, you would only need to have a 12 month history of receiving the 1099, as opposed to the usual 2 year history because your prior experience in the same field, doing the same duties, will count, uh, for purposes of qualifying you for the loan. So basically two years, but if, if they were in the same business that previous year, that same business, same job type, uh, usually they like it to be, if you were in a job type that required some type of license or certification. I don't see any other questions, so I think we can wrap it up, but absolutely great program there. And definitely for loan officers out there, make sure you're paying attention to your borrow. When you're talking about bank statements, if it's mostly coming from a 1099, this is definitely something to be aware of, and you're going to capture more income for sure. So with that being said, we'll go ahead and wrap it up here for today. 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. Appreciate everybody tuning in. We'll see you tomorrow 11 a. m. Eastern for the next episode of daily rates live with the mortgage calculator Have a great day, everyone