Daily Mortgage Rates LIVE - 10/09/2024 - Low FICO Score Loans

In this episode of "Daily Mortgage Rates LIVE," we’re tackling a topic that gives hope to many aspiring homeowners: Low FICO Score Loans. If you’ve been struggling with a less-than-perfect credit score and think homeownership is out of reach, think again—this episode is for you!

Having a low credit score doesn't have to be the end of your dreams of buying a home or refinancing your mortgage. Low FICO Score Loans are designed to provide financing options for individuals who have faced credit challenges in the past. Our expert hosts will break down everything you need to know, including:

📉 What are Low FICO Score Loans, and how can you qualify even if your credit isn’t perfect?
🏦 How do these loans differ from conventional mortgages, and what are the key eligibility criteria?
💰 What are the potential advantages and disadvantages, including interest rates and down payment requirements?

We’ll also discuss strategies for improving your chances of approval and how to navigate the process successfully. Whether you're looking to buy your first home, move into a better space, or refinance despite your credit history, this episode will give you the insights and practical tips you need.

Tune in to "Daily Mortgage Rates LIVE" and learn how Low FICO Score Loans can help you achieve your dream of homeownership. Don’t let a low credit score hold you back—get the knowledge you need to take control of your financial future today!

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 Th

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 09, 2024 • 03:01:54 PM: 0:09

So 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 shows, go through our actual live mortgage rates. And then we do a deep dive into a different loan type. Today's loan type is going to be not necessarily a loan type, but, uh, you know, loans to accomplish the same goal here, which is low FICO score loan. So they'll take us through some great ways to solve that problem here shortly. But first we will go through our rates. So Nick, if you're ready, let's pull up our live rates and see what the rates look like today. Lots of news in the market. Rates are looking like they calmed down a little bit. Finally, we will compare all the different. Uh, standard loan programs for today. It is October 9th, just after 11 a. m. Eastern. So all of our initial rate sheets are live for today. And if you'd like an itemized loan estimate that breaks down all the fees, please get with our team members. We have plenty of loan officers to help. For our demo, we will always set up a basic scenario so we can compare the APR across the programs. We'll use a single family home, 500, 000 purchase, 400, 000 loan amount. That's an estimated 20 percent down payment, 80 percent loan to value. We'll use a 760 estimated FICO credit score. And an estimated 40 percent debt to income ratio. Check those settings. Let's check out the rates for today. So first up our 30 year fixed conventional option for a primary home. Most common option people think of when they think of a mortgage. Rates today come in at 6. 124. Final APR 6. 427. And if for any reason our customer doesn't qualify for a conventional option, we typically want to quote an FHA option to compare. FHA allows more leniency on credit issues and a higher overall debt to income ratio, but does require upfront and yearly mortgage insurance. Rates come in today 5. 25, final APR 6. 193 with all the cost and mortgage insurance. So, if our customer qualifies for both, FHA could be a touch cheaper here if they're willing to do the mortgage insurance. And our customers that need to use FHA, definitely very comparable option to conventional. And the A is only for eligible vets and active service members. These programs are definitely great for those that are eligible. Rates today come in at 5. 5, final APR 5. 786. And notice when we compare that across the programs, the VA option is going to be the best for our eligible borrowers. So definitely take advantage if you are eligible. And the final standard option that every banker lender has USDA is only for properties in USDA eligible areas. That's the rural areas of the country. So if the property is eligible and the borrower is eligible, these are great options to compare. USDA comes in today, 5. 25 final APR with all the properties 5. 996. So we'll compare that to FHA typically, if our customer is shopping in these areas, and the USDA option is going to be a touch cheaper than both FHA or conventional. So definitely a good option for those shopping in the rural areas. And that rounds out our standard options that any bank or lender has, but if a customer doesn't qualify, they may have to deny them. We have 5, 000 plus other options. Starting here with our non QM AltDoc option for a primary home. So if our customer doesn't qualify using tax returns, standard documentation for conventional FHA, etc. Needs to switch to using alternative documentation like bank statements, 1099s, etc. You can switch to this program. Rates as low as 6. 125 today. Absolutely amazing. Finally, PR 6. 450. Almost identical to conventional today. To use alternative docs of great opportunity for our borrowers needing to go with our alt doc options And we have tons of options for investment properties as well So our non qm alt doc is up first. So bank statement or similar for hsl for investment property Finally, there are 7. 415 And we'll compare that with our other investment options. Conventional is coming in today at 6. 875 for an investment property. Final APR 7. 211, so a touch cheaper than our AltDoc. And remember, there are no government programs, so no VA, USDA, or FHA. But we do have all kinds of amazing options under our favorite program, under DSCR, stands for Debt Service Coverage Ratio. No employment information needed. No income information needed from our borrower. Simply use the estimated rents to determine a DSCR value. The estimated rents can cover the estimated expenses, aka the property cash flows. That's a ratio of one or higher, which is preferred. And with a three year prepayment penalty, which is standard. Rates come in today, 6. 375. Final APR, 6. 682. Blowing conventional out of the water. Absolutely amazing. And we can add a five year prepay to some programs, lowering it even more, rates as low as 6. 25, final APR 6. 541, again, blowing conventional away. And we have our no prepayment penalty option, as some states don't allow it, and some investors prefer not to have a prepayment penalty. Reaches a 7 percent final APR 7. 350. As usual, the no prepayment penalty option is going to be just a touch above conventional, but I would still say a hundred percent of investors would choose the DSCR option in this case. And if possible, add a prepayment penalty. It makes the deal quite a bit sweeter and the final two demos. We always do our 30 year fixed second mortgages. These are very popular requests as many of our customers have lower rates than what we're showing here for their first mortgage But still need to access their equity We can do that typically with a heat lock But these options for most borrowers even better because they are not adjustable in lower rates than a heat lock So our 30 year fixed second mortgage for a primary home Get cash out of that primary home without using a heat lock rates as low as eight percent much lower rates than a heat lock Final APR 8. 426 So great option for those primary homeowners to get that cash out And same option for investment properties rates as low as 9. 375 final APR 9. 731 and heat locks are rare for investment properties. So these are great options for our investors that don't want to touch that first mortgage. Now let me switch up the screens here and get into today's topic. So when we're doing our live demo, remember we always use the high credit score so we can see all the different programs pop up. But of course we always have options for our lower FICO scores. It's just not as comparable. We have to find those specific programs that offer those options. So Jose will be able to present some of those today. So Jose, what are our lowest options that we have for our borrowers? Good morning, everybody. Thank you for joining us for daily mortgage rates live with the mortgage calculator. We have some great options today. Uh, some of our options you'd probably figure out and some of our options that are outside the box solutions here that we love to provide at mortgage calculator. So let's jump right into our low FICO score. So our first option here is for our FHA borrower and pleased to say that we, excuse me, we are able to go down to a 500 credit score. Um, with minimum down payment of 90%. Anytime your score is below 580, you are going to be required to give at least 10 percent down for any FHA loan. That doesn't mean it's a guarantee it's going to be approved, just that is the minimum down payment when the credit score drops below 580. And our low FIO score 7% at a cost of 2.5 points for our 500 credit score, FHA purchase. Now our 500 credit score, USDA purchase, again, great news possible down to a 500 lowest, uh, cost option here is 7.375 at a cost of one point, and you can buy that down all the way to 6.25% at a cost of 2.25 points. In our VA purchase, uh, we're able to easily go down to a 580. Now, these are our compliant rates. Uh, we do have options below a 580, but in order to be able to offer those rates, you will need a little bit of seller credit. As the seller would have to pay for some of the loan discount fee for the borrower to be able to be offered those rates. So, here we have at a 580 with no seller contribution, 6. 75 is our lowest cost option at a cost of 1. 199 points. And you can buy that down to 6 percent at a cost of 2. 449 points. Now for our outside the box solutions, we actually have DSCR possible down to a 575 credit score. It is going to require 40 percent down as 60 percent LTV is our maximum LTV when our score is that low. And you're looking at 10. 875 at a cost of one discount point. And for our AltDoc purchase, uh, AltDoc, we would consider bank statement, profit and loss, 1099, uh, would be the, uh, AltDoc options here. And, uh, it is possible down to a 600 credit score. And we can go up to 80 percent on both investment and primary 80 percent LTV. In this case, we have an investment purchase, 80 percent LTV. Our lowest cost option is 10. 625 at par. And you can buy that down all the way to 8. 999 at a cost of 3. 375 points. And now for some cash out options. The same option available for purchase at 60 percent LTV is available for a DSCR cash out at 60 percent LTV with our 575 credit score. A little bit higher on the rate due to a transaction being a cash out. We're looking at 11. 125. At a cost of 1. 4 DSC, our cash out with a 575 credit score and our low credit score option here for FHA 580 credit score, get us up to the max 80 percent LTV. Um, there are options below a 580, but in order, uh, That would be one where you'd have a compliant to see if you get any bonafide discount points so that you can offer that option here. The one without any issues is 80 percent LTV. And you're looking at 6. 75 is our lowest cost option. Half a point cost there. And you can buy that down to 5. 625. At a cost of 2. 5 points. And our last option here are outside the box solutions. This is for the alt doc cash out refi, the same one that is 80 percent on a purchase. It's 75 percent on a cash out refi at a 600 credit score. Uh, lowest cost option is 10. 75 percent interest rate at a cost of half a point. And you can buy that down all the way to 9. 875 at a cost of 2. 375 points. So great options here at the Moody's Calculator, uh, for low FICO score borrowers, agency, as well as non QF. All right. Thank you, Jose. Uh, I don't see any questions. I think we'll wrap it up, but definitely some amazing options there. So make sure to, uh, check out all those options when you need them. We'll 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 topic So we'll be back tomorrow with a new topic. Thank you everybody for tuning in We'll see you tomorrow at 11 a. m. Eastern for the next episode of daily rates live with the mortgage government