Daily Mortgage Rates LIVE - 10/01/2024 - Blanket (Portfolio) Loans

In this episode of Daily Mortgage Rates LIVE!, we’re diving deep into the intriguing world of blanket (portfolio) loans. If you’re an investor managing multiple properties, this financing solution could be your ultimate key to streamlining your investment strategy. Join us as we explore how blanket loans consolidate multiple mortgages into one, simplifying your financing and potentially saving you both time and money.

We'll discuss the unique benefits of blanket loans, such as increased flexibility and easier management of your real estate portfolio, along with potential pitfalls to watch out for.

Tune in to discover how blanket loans can empower you to take your real estate ventures to the next level! Don’t miss out on the insights that could transform your investment approach.

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 Inve

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 thousands of Non-QM mortgage loan program variations 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 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...

Transcript

Restream recording Oct 01, 2024 • 03:05:44 PM: 0:09

All right. 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 the show is go through our actual live mortgage rates. And then we do a deep dive into a different loan type and today's loan type. There's going to be blanket loans, AKA portfolio loans. So we'll go through those here shortly. But first we'll pull up our rates. So Nick, if you're ready, let's go ahead and pull up today's live rates and see what they look like this morning. Right. So a little bit of change from yesterday's news, but we'll go ahead and check out the rates for today. It is October 1st, just after 11 a. m. Eastern. So all of our standard programs have their initial rate sheets for today. We will compare a standard scenario and compare the APR across the programs. If you'd like a full breakdown and itemized loan estimate of all the fees that go into the APR, please do it with our team members. They'd be happy to send one over. For the demo, as we do every day, we'll set up a standard scenario, single family home, 500, 000 purchase, 400, 000 loan amount. That corresponds to 80 percent loan, 20 percent down payment. Use an estimated 760 FIFO credit score and an estimated 40 percent debt to income ratio. So, let's check the rates for today. Uh, looks like it just went up just a tick from yesterday. First up, our 30 year fix conventional for a primary home, typically the most common option people think of when they think of a mortgage. Rate as low as 5. 875. Final APR, 6. 171. So, ticked up just a touch over 6. We were just a touch under 6 yesterday. And if for any reason our customers don't qualify for a conventional option, you typically want to quote a FHA option to compare. FHA allows more leniency on credit issues and a higher overall debt to income ratio, but it does require upfront and yearly mortgage insurance. 4. 99 is the rate, and if I'm like you are with all of the mortgage insurance and fees, 5. 912. So notice if our customer qualifies for both programs, they may consider FHA if they're willing to do that mortgage insurance. And our customers that need to use it, definitely a good option. Very comparable and conventional at the moment. And moving on to our VA is for our eligible vets and active service members are eligible for VA loans rates as low as 5.125 final A PR 5.41 of four with a standard funding fee there. And when we compare, VAs going to always be the best option for our eligible vets and service members, and we compare to other programs. And the final standard option here, USDA is only for properties in USDA eligible areas. That's the rural areas of the country. The property is eligible and the borrower is eligible. These are great to consider. It's as low as 4. 99 final APR with standard fee 5. 728. So when we compare that to FHA, if our borrowers are shopping in a rural area, USDA is going to definitely be a better option and better option than conventional as well. So definitely look for those programs if you're looking in those rural areas. And moving on to our non QM options, many other banks or lenders would have to deny our customer. Unfortunately, we have 5, 000 other options here with our non QM alt doc. So if a customer doesn't qualify for standard documents for conventional FHA, et cetera, using two years of tax returns, needs to switch to alternative documentation, we can use bank statements, 1099s, asset related, P& L, all kinds of different options. Bank statement option coming in today, 6. 00, and final APR, 6. 297, so just a touch above conventional to switch to all docs, which is amazing. And we have tons of other options here for investment properties. First up are non QM alt doc options, so bank statement or similar for investment properties coming in at 6. 5, right? Final APR, 6. 823, and let's compare that to the other investment options. Conventional today is our only standard option. Remember government programs, USDA, FHA, VA do not work for investments. So we'll compare that to the standard conventional 6. 25 rate final APR 6. 581, which is cheaper than the all doc option, which is typical, but not cheaper than our favorite loans. DSCR stands for debt service coverage ratio. Don't even need any income information or employment information from our borrowers. We simply use the estimated rents from the appraisal to determine the DSCR ratio. The estimated rents can cover the estimated expenses, aka the property cash flows monthly. That's a DSCR ratio of one or higher, which is preferred. And this option here we're looking at is our three year prepayment penalty option. Rates coming in today, 6. 125. Final APR, 6. 450. Beating conventional, absolutely amazing. And some of our programs allow a five year prepay to sweeten deal even more with a five year prepayment penalty. We can drop the rates as low as 5. 875. Amazing. Final APR 6. 169. So definitely the best option there for our investors. And we do have a no prepayment penalty option as well. Some states don't allow it and some investors don't want it. That's not a problem. Rates as low as 6. 5. Final APR 6. 823. Which is just a touch higher than conventional. I would still say most investors would prefer a DSCR option. And the final two options are second mortgage options here are very popular as are many of our clients have a low rate first mortgage lower than what we're looking at here and they still want to get cash out and the best way to do that is a second mortgage or a key lock is the traditional option. But these fixed rate second mortgages are our favorite options here. Great. For a primary home, we can get cash out rates as low as 8.125, file a PR 8.527. Much lower rates than HELOCs, and obviously these are fixed instead of adjustable. And we can use the same program for our investors, which is very rare. For HELOCs, we can get our investment properties, cash out rates as low as 9.25, file a PR 9.557 without touching that first mortgage. And these are both non QM programs as well, so we can use bank statements, 10 90 nines, et cetera. Let's go ahead and switch back over to today's topic definitely a unique twist that we can't do in our live pricing a Blanket or portfolio loan is a loan for multiple properties under one loan a common request for our investors so Jose before we check out the options, let's talk about why we would use this and Particularly why we would not it's very common misconception there that this is It's a preferred option when typically it's the option of, uh, for only a specific set of circumstances. So let's check these out. Great. Good morning, everyone. Thank you for joining us for daily mortgage rates live with the mortgage calculator. Uh, first let's get into, excuse me, what a blanket loan is. Uh, commonly known as a portfolio loan, but we don't like to use that phrase because portfolio loans could be misconstrued as a loan that a lender makes and keeps in their portfolio and doesn't sell. A blanket loan is a loan that is for multiple Individually titled properties all under one loan. That's why they call it a blanket loan. So you could have 10, let's say for example, 10, uh, one to four unit properties, uh, in the same state being purchased from the same seller, uh, could be purchased with a blanket loan or, uh, also, uh, 10 properties all owned by the same borrower being refinanced where they're all also in the same state. That's a very critical. Because, uh, lending laws change from state to state, so you cannot commingle, for example, properties in Florida with properties in Georgia. on the same loan. So we've covered what a blanket loan is, uh, when it, and uh, now when would you use a blanket loan, right? Uh, one of the common misconceptions is that the blanket loan will have a much lower closing costs. Now there, there may be some savings in terms of, for example, individual underwriting fees that are assessed against each, on each loan. Right. If you have 10 properties and you finance them individually, you're going to have 10 underwriting fees, but at the same time, you're, that's going, that savings is going to be offset by some of the fees. Uh, put on to blanket loans like, uh, the property review fees. If you have one to five properties, it's a certain fee. You have, uh, you know, six to 10 properties is a certain fee. Uh, you have funding fees, closing fees. So different fees that are associated with the underwriter and lender having to review multiple property packages for one loan. And there also will be, um, Individual title policies that are going to be taken out because each property's title is going to have to be reviewed. You may save a little bit on the closing fee because you're only going to have one closing instead of 10 closings, but then again, those are nominal savings. You also have to be aware of that. That, um, now when you would really want to use or the case, I should say, where the blanket loan is most popular is when you're trying to finance, uh, a bunch of properties with low dollar values, uh, we have options that go as low as 50, 000 in loan amount, uh, allocated to each property. And we have others that have a minimum loan amount of 100, 000, excuse me, minimum property. Thank you. the value of 100, 000 per property. Uh, those are the two common ones that we have for the blanket loans. So typically the investors are going to, they're going to buy 10, 15 properties of 000. The only way to really get to finance those properties would be through a blanket loan. Maybe you could find hard money somewhere, but you're really not going to find a DSCR loans for 50, 000. But you can get two or three properties under one blanket loan. of where you where each is getting allocated a fifty thousand dollar loan amount and we would perfectly be able to close that loan. So be aware when it's good, uh, and also be aware that blanket loans may have restrictions being able to individually, um, uh, transact properties out of the blanket loan. What I mean by that, that's called the carve out And which is when you have, let's say five properties in a blanket loan, and all of a sudden somebody makes you an offer, you can't refuse on one of the properties, and now you want to sell it and get it out of the blanket loan, you would have to make sure that the blanket loan, uh, allows for a carve out because if it does not allow for a carve out, which means removing one property out of the portfolio, then in essence, to be able to sell that one property, You would have to, uh, refinance out of the blanket loan, maybe by individually refinancing each of the properties, but do be aware that, uh, that would be one of the biggest issues. If you do not bring it up to your borrower is carve out. So make sure you cover carve outs and if they're fine with that, then, uh, full speed ahead. So let's go ahead and, uh, share our options, uh, This morning for you, uh, maximum loan to value, uh, for a blanket loan purchase that we have is 80 percent LTV. Um, so this example here is I'm assuming seven 40 plus credit score, which will allow me to go 80 percent LTV, uh, with the best pricing and here we have 6. 876 percent at a cost of one point. For this, uh, DSER blanket loan, 80% LTV, the max. Now when the credit score drops to six 80, so six 80 to 6 99, uh, it is 70%, 75% LTV, so basically below 700, 6 80 to 6 99, you, it is maximum 75% LTV, and you're looking at seven. 0. 376 percent at a cost of one point. Now in the pricing example that I gave today, um, I priced them all out with one loan discount point, uh, just so that we could see the effect of the credit score all the way across the board. So this one, 680, 75 percent LTV because we dropped below a 700 credit. And now the minimum credit score for this option. Is 660 and 70 percent is the maximum LTV with a credit score of 660 to 679, uh, 7. 7 to 6 percent is our rate at a cost of one point. So pretty good rates here, even though it's only a 660 credit score. And now for some cash out refinance options. Here's my option with a 740 plus credit score. Uh, the rate does not get any better above a 740. So you're looking at 6. 9, 7, 6 percent at a cost of 1. 75 percent LTV, which is the maximum LTV for this, uh, blanket loan TSC. And our lowest credit score possible for a cash out refi is our last example. 660 is a credit score. 60 percent LTV is the maximum LTV with a 670, excuse me, with a 660 to a 679 credit score. 60 percent is the maximum LTV for a cash out refi. 7. 651. Is our rate at a cost of one point. Now it is possible to buy the rate down more or pay no points and get a little bit higher rate. But this is the one I chose for, uh, for the, uh, comparing to the other, uh, rates chosen. So please do look to the mortgage calculator for your blanket loans, non QM and agency. All right. Thank you, Jose. I don't see any questions there in the chat. Uh, definitely a great program, especially when trying to finance multiple low value properties, especially, right? So, yeah, if I just wanted to make one good point here for the MLOs listening here, remember the blanket loan, when you get a borrower that starts asking you questions about, hey, you know, can you finance a 50, 60 or 70, 000 property? Make sure to ask them why. Okay. They're asking to make sure to find out if they're looking to buy multiple properties, because, uh, you know, you can't finance the one property for 70, 000 purchase price, but you can certainly finance two or three of them or more. And you would be surprised that that may actually be what they're looking for. And if you bring it up and you suggest that you may end up with a blanket 000, which actually happened to you pretty recently yourself. Right? Those are. Uh, yes, sir. Uh, he, he asked me that same question. How low can you go? And instead of being discouraged and thinking, Oh my God, uh, uh, I instead asked him, you know, why are you asking that? And how much do you have available for the purchase? And when he told me he had like, I don't know, four or 500, 000, that's when I pre approved him for a blanket loan. I don't know, it must've been about a million or 1. 2, 1. 3 million of which he opted to end up finding, I think it was seven or eight properties. And it ended up being like a six hundred and fifty two thousand dollars. Awesome. Just don't leave money on the table there. All right. I still don't see any questions. So we'll go ahead and wrap it up. 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 be back tomorrow with a new loan type. Appreciate everybody tuning in. We'll see you tomorrow at 11 a. m Eastern for the next episode of Daily Rates Live with the Mortgage Calculator.