Daily Mortgage Rates LIVE - 10/10/2024 - 2nd Mortgage HELOANS

In this episode of "Daily Mortgage Rates LIVE," we explore an exciting opportunity for homeowners looking to make the most of their home equity—2nd Mortgage HELOANS (Home Equity Loans). If you've been wondering how to leverage the value in your home for big projects, debt consolidation, or other financial needs, this episode is a must-listen!

2nd Mortgage HELOANS allow you to tap into your home's equity through a fixed-rate, second mortgage loan, providing a lump sum of cash for whatever purpose you need. Whether you’re planning a home renovation, paying off high-interest debts, or funding a major life expense, a HELOAN can be a powerful financial tool.

🏠 What exactly is a 2nd Mortgage HELOAN, and how does it work?
💡 Who should consider taking out a HELOAN, and what are the key benefits?
📈 What’s the difference between a HELOAN and a HELOC (Home Equity Line of Credit)?
⚠️ What are the potential risks to be aware of before applying?

Our expert hosts will guide you through the ins and outs of 2nd Mortgage HELOANS, covering eligibility requirements, the application process, and how to determine if this is the right financing option for you. We’ll also discuss how a HELOAN differs from other home equity solutions and the pros and cons that can impact your financial strategy.

If you're ready to make your home equity work for you, this episode will provide the information and expert insights you need to navigate the world of 2nd Mortgage HELOANS with confidence. Tune in to "Daily Mortgage Rates LIVE" for valuable tips on making informed decisions and maximizing your financial opportunities. Don’t miss out—subscribe now and take your next step towards financial freedom!

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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.

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Transcript

Restream recording Oct 10, 2024 • 03:02:29 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 for a few programs. Then we do a deep dive into a different loan type. And today's loan type is going to be second mortgages or HMOs. So I'll go ahead and pass it over to Nick to go through the rates and then Jose will talk about some second mortgage programs. So Nick, if you're ready, let's go ahead and check out today's rates. Alrighty, we'll pull up today's rates for October 10th, just after 11 a. m. Eastern. So all the initial rate sheets here are live. We'll set up a standard scenario to compare the APR across the program. If you'd like a breakdown of all the fees, the itemized loan estimate, Please get with one of our team members. They'd be happy to help you out. For our demo, we always set up a standard scenario. Single family home, 500, 000 purchase, 400, 000 loan amount. That corresponds to 80 percent loan to value, 20 percent down payment. Use an estimated 760 FICO credit score and an estimated 40 percent debt to income ratio. So let's make the rates nice and big here. And first up is, oops, click the wrong button. Sorry. First up is our 30 year fix conventional for a primary home. Rates today come in at 6. 124, final APR 6. 439. And if for any reason our customer doesn't qualify for a conventional option, we typically want to compare an FHA option. FHA allows more leniency on credit issues and a higher overall debt to income ratio, but does require upfront yearly mortgage insurance. FHA comes in today 5. 25, rate, final APR with all the fees and mortgage insurance 6. 205. And if our customer qualifies for both, they may consider FHA, could be a touch cheaper. They're willing to do the mortgage insurance and our customers that need to use it. Definitely very comparable option. VA is only for eligible vets and active service members. For those that are eligible, these programs are amazing. 5. 5 rate today. Finally, if you have the standard funding fee, 5. 798. And if we compare that to FHA and conventional, VA is definitely going to be the best option for eligible borrowers. And the final standard option here, USDA, those are for properties in USDA eligible areas. Those are the rural areas of the country. If our property is eligible and our borrower is eligible, these are great options to consider. Rates come in today, 5. 375. All the fees included, APR comes in at 6. 125, which beats FHA by just a touch of our customers comparing and beats conventional by just a touch for our customer that might be comparing. So good option for those rural areas. And. That rounds out our standard options. Next comes our non QM AltDoc options. So many other banks or lenders do not have these options that we have and would have to deny the customer. Fortunately, we have alternatives where the customer doesn't qualify with tax returns and standard documents needed for a conventional FHA, etc. They can switch to using alternative documentation like bank statements, 1099s, email statements, all kinds of different options. We have over 5, 000 variations. 6. 125 finally car 6. 450 almost identical to conventional today, which is pretty amazing. And the investment property option for non QM again, bank statement or similar. Comes in today, 6.999 final a PR 7.415, and we'll compare those with our other investment property options. So first off, our conventional here, there are no government options, so no U-S-D-A-F-H-A or va, but conventional comes in today, 6.875. Rate final, a PR 7.211. Beating alt dock by a touch. But not beating our DSCR. Our favorite option. DSCR stands for debt service coverage ratio. We don't need any income information or employment information from our borrowers. So great options for our investors simply use the estimated rents to compare to the estimated expenses. If the estimated rents cover the estimated expenses they pay, the property cash flows, that's a ratio of one or higher. And this option here is our most common option with a three year prepayment penalty. Comes in today, 6.3758. Finally, PR 6.682, beating conventional by quite a bit. And we can sweeten it up a little bit with a 30, uh, sorry, a five year prepayment penalty. Rates today come in at 6. 25, final APR 6. 553, and the final DSCR option is a no prepayment penalty option to check out. Rates come in today at 7, final APR is 7. 311, so just a touch higher than conventional. I'd still say a hundred percent of investors would prefer this to conventional if they do not want a prepayment penalty as DSCR loans are preferred by most. And our final two things we go over today are actually our topic for today are 30 year fixed second mortgages. So these are for our customers that may have lower rates than what you see here for all the other programs for their first mortgage. Still want to access their equity in their home, still want to get some cash out, but don't want to touch that first mortgage. And these are alternatives to HELOCs, which would typically be the most common option. So instead of a HELOC, we can get a 30 year fixed. It's not adjustable, it's fixed. and much lower rates than a HELOC. For our primary home, we can get rates as low as eight percent, final APR 8. 370. And for our investors, we can get rates as low as 9. 375, final APR 7, or 9. 731. And HELOCs are very rare for investors. This is a great option. But let's have Jose break this down a little bit further, as these general price quotes often don't do a special program like this. Justice. Where we can go through all the specific examples. So. Jose, let's check out some second mortgage options. Good morning everybody. Thank you for joining us for Daily Mortgage Rates Live with The Mortgage Calculator. He loans are fixed rate, closed end second mortgages. As opposed to a HELOC, uh, which is an open ended second mortgage, could be variable rate or could be fixed rate. We do have fixed rate HELOCs. The difference is that the HELOC is open end, so you pay interest on what you owe. Versus the he loan, which is a closing mortgage. And it has a fixed amortization and a fixed amortization table as well. Now, the other really big advantage of the he loans versus the he locks is the multiple income streams that we can use. Uh, we can use a traditional full doc. Uh, we can also use alt doc like bank statements. Profit and loss reports and 1099s. And we can also use the R which is pretty amazing as well. So let's get into our options today on our fixed rate. He loans. Uh, first option here we have is that the maximum LTV or maximum C LTV, excuse me, of 90 percent combined loan to value. We're talking second mortgages is the LTV when you combine the loan amount for the first and the loan amount for the second divide that by value and there you have your combined loan to value. So in our full doc option here. Uh, for our refi 10. 375 is our lowest cost option at par, and you can buy that down to 9. 625, and this is for a straight out, uh, finance. Now we do have a piggyback loan transactions that are possible. So I do have one example here, but a piggyback transaction, which is basically a combo loan, when you're purchasing a property, you have a first loan for X amount, a second mortgage for. Y amount and, uh, usually, uh, different reasons why you may do that. Uh, mortgage insurance, uh, combo loan on a condo in Florida, right? Where you're trying to get maximum CLTV of 90%. So here, uh, 10. 375 is our lowest cost option at par. And you can buy that down to 9. 625 at a cost of 2. 125 points. For our combo. Now back to the cash out refi options. Now this is for a primary, uh, cash out refi, 85 percent CLTV, because this is a bank statement option. So, uh, 85%, uh, CLTV is the max CLTV on that. You're looking at 10. 375 is our lowest cost option at par, and you can buy that down to 9. 625 at a cost of 2. 125 points. And now for our DSCR option, maximum 70 percent LTV for this option. Uh, the DSCR option does allow adding a prepayment penalty to it. Uh, 11. 875 lowest cost option and 11. 75 lowest rate option at the maximum. 70 percent of CLTV. You'll probably get a few more options if you drop the CLTV a little bit, but this is our maximum CLTV. And now a cash out option using profit and loss for an investment property. We are able to go to 75 percent CLT for this. 11. 5 percent is our lowest cost option. And you can buy that down all the way to 10. 625. And our last option here is using 10. 99. So we have run the whole continuum here from full doc, DSCR, P& L, bank statement, and now 10. 99. This one for an investment property, 75 percent CLTV max on this one as well. 9. 75 lowest cost option, actually with a little bit of a lambda credit. And you can buy that one down all the way to 9. 375 at a cost of one point for your 1099 he loan investment cash out refund. So definitely look to the mortgage calculator for all of your second mortgage, he loan and he lock options. All right. Thank you. I don't see any questions here. So I think 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 new topic So we'll see you all tomorrow with a new topic to talk about at 11 a. m Eastern for the next episode of dv rates live with the mortgage calculator everyone. Take