Daily Mortgage Rates LIVE - 10/15/2024 - CDFI No Income Verification Loans

In this episode of Daily Mortgage Rates LIVE, we explore the rising interest in CDFI No Income Verification Loans, an innovative financing option that’s changing the game for borrowers with unconventional income streams. CDFIs (Community Development Financial Institutions) are known for their mission to provide more flexible lending solutions, and their No Income Verification Loans offer a unique pathway for borrowers who don’t fit the traditional income documentation mold.

Join us as we break down how these loans work, who qualifies, and why they’re becoming a popular choice for self-employed individuals, real estate investors, and others with non-standard income. We’ll cover the benefits and potential risks of these loans, along with expert tips on how loan officers can use this product to serve a wider range of clients. If you're looking to expand your lending toolkit and tap into new markets, this episode is for you!

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 I

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 Oct 15, 2024 • 03:03:41 PM: 0:09

So welcome everyone. My name is Kyle Hiersche. I'm the CEO. 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. Then we do a deep dive into a different loan topic. And today's topic is going to be CDFI, no income verification loans. So Jose will take us through that here shortly, but first we'll go ahead and pull up the rates. So Nick, if you're ready, let's see what today's rates are looking like. All right. So we will check out today's rates. The date set is October 15th, just after 11 a. m. Eastern, so all our standard programs have their initial rates for today, and we'll set up a basic scenario to compare the APR. If you'd like a full breakdown and itemized loan estimate, itemized all the fees that go into the APR, please get with our team members. They would be happy to send that over. For our demo, we set up a basic scenario, a single family, uh, home, 500 purchase price, 400, 000 loan amount that corresponds to 80 percent loan devalued, 20 percent down payment. That's it. And we use an estimated 760 FICO credit score and an estimated 40 percent debt to income ratio. With those settings, let's go ahead and Check out the rates for today. So first up is our 30 year fixed conventional option for a primary home. This is the most common option people think of when they think of a mortgage rates today coming in at 6.124. Final A PR 6.427. And if for any reason or customer doesn't qualify for a conventional option, typically want to compare an FHA option. FHA allows more leniency on credit issues and a higher overall debt to income ratio. It does require upfront and yearly mortgage insurance. FHA comes in at 5. 258. Final cost of the APR with all the mortgage insurance and costs included is 6. 217. So when we compare the APR, conventional could be a touch more expensive. So our customer that qualifies for both could consider FHA if they're willing to do the mortgage insurance. And for customers that need to use FHA, definitely a great option. And our VA programs, only for our eligible vets and active service members. If you are eligible, these are great to consider. Rates as low as 5. 624. Finally, PR 5. 914 with a standard funding fee. And notice the VA option is always going to be cheaper than FHA or conventional for our eligible VA borrowers. And our final standard option that every banker lender has access to here, USDA programs, only for properties in USDA eligible areas. So if the property is eligible and our borrower is eligible, these are great options to compare. USDA comes in at 5. 5 rate. Final APR 6. 218. So just like, uh, on Friday, usually USDA is a touch cheaper, but it's almost identical to FHA at the moment, but usually you want to consider, uh, USDA as a touch cheaper and is a touch cheaper than conventional. So definitely consider those for those shopping in those areas. And that rounds out the standard options that every banker and lender has. But if our customer doesn't qualify, any banks or lenders have to deny that customer. We love to approve our customers with programs such as our non QM alternative docs. So the customer doesn't qualify for conventional or FHA using tax returns, et cetera, standard documentation. We can switch to using alternative docs like bank statements, 1099s, P& L programs, asset related programs, all kinds of different options. And the bank statement option here is coming in today, 6. 25 rate on APR with all fees here 6. 578. So that's pretty amazing. Almost identical to conventional today. They use a non QM program, which is amazing. And now we'll check out our investment options. So first up here, our non QM alt doc option. So bank statement or similar for an investment property rates come in today, 6. 99, 6. 99, Final APR here, 7. 327, and we'll compare that to all our other investment property options. Tons of options here for investments. First up, our conventional. Remember, there are no government options, so no FHA, VA, or USDA, but we do have conventional or investment properties coming in today, 6. 875 rate, final APR 7. 1. So it's cheaper than our AltDoc by a touch, which is typical. But not cheaper than our favorite option. Our DSCR option stands for debt service coverage ratio. We don't need any income or employment information from our borrower. We simply use the estimated rents to determine a DSCR value. The estimated rents can cover the estimated expenses, aka the property or cash flow monthly. That's a DSCR ratio of one or higher, which is preferred. And this option here is with a three year prepayment penalty coming in today at 6. 375 rate. Final APR, 6. 707, much better than conventional, which is amazing. And we can add a five year prepayment penalty to some of our programs, uh, today, uh, it's actually about the same rate here, 6. 375 rate, but notice APR is a touch cheaper, 6. 682. And hopefully once the rates all update for today, we'll have some other options as the five year should be a touch lower. And the final DSCR option we always present is our no prepayment penalty option, as some states don't allow it, and some of our customers don't want one. Rates for no prepayment penalty come in at 7%, final IPR 7. 298. So that's higher than conventional, which is typical, but most investors still prefer a DSCR option. And our final two options here are non QM second mortgage options for our fixed rate second mortgages. We did an episode on this last week. Very cool options for our customers that may have a first mortgage that is lower than what we're Looking at here for all the other options, but still want to access their Equity, their cash out can get cash out of their primary home rates as low as 8 percent as opposed to a HELOC. That's a much lower rate and obviously fixed instead of variable final APR is 8. 370. So great option to get cash out of that primary home without going into a HELOC program. And same thing for our investors. We can use our fixed rate second mortgage to get cash out of an investment property as HELOCs are very rare for investments anyway. And still keep that first mortgage rate as low as nine point three seven five for the second mortgage I like our nine point seven three one to get cash out of that investment property So those are all of our standard options but today I'm going to have jose Present one that we definitely can't pull up on our live price or demo. This is a very unique program. It's actually Technically illegal, right? So this is a program that would otherwise be illegal for any mortgage company to do But there is a specific designation that allows us to assist borrowers that are in specific needs for this type of program. So, Jose, let's talk about first why we can break the law here and the specific borrowers that we're intending to help for this program. Good morning, everyone. Thank you for joining us for Daily Mortgage Rates Live with the Mortgage Calculator. The CDFI program is actually a designation granted by the Department of Treasury. Financial institutions to assist underserved communities and underserved borrowers. Furthermore, if the borrower is African American or Hispanic, they are considered what's called CDFI eligible and get an additional discount off of the rate. However, the CDFI program is open to all borrowers, not just CDFI eligible borrowers. It is maximum 80 percent loan to value. Uh, no income verification, no job verification. Uh, so they've, they've really, um, reduced the guidelines on that respect, but again, 20 percent down considerable amount of reserves. Uh, in some cases, as much as 12 months of reserves are required. Uh, this is, um, also, uh, for primary and second homes. And please note that the second home option does not have a loan level price adjustment, same rate in LTV as the first. Which is awesome because this is a great program for borrowers, for example, looking to relocate from, uh, you know, what part of the country to the other, they haven't yet accepted that job. They want to have the place where they're going to live first. Then they can, uh, calmly accept the job that they want. Or for example, they have to sell their existing home, but they want to close. On the new home first and sell the existing home, uh, calmly and not rush and maybe lose money. So those are two very good examples where we can use this product. So let me go ahead and share my options with you today. First example here at the maximum, uh, 80% LTV, uh, 20% down, uh, is the minimum down payment. Uh, seven 20 plus credit score is required for the 20% down option, and you're looking at 8.875 at a cost of 1.75 points. Uh, there are lower buy down amounts than 1.75 points, but they will result in a higher rate. Our next option here is for the credit tier 680 to 719. And this credit tier, it is 25 percent down minimum. You're looking at 8. 5 percent rate at the same cost of 1. 75. I kept 1. 75 as the cost across the board so we could compare the rate. And now at our lowest credit tier, which is six 60 to 6 79, 30 5% down is the minimum down payment. 9.125 is the rate at the cost of 1.75 points, and now some cash out refis. This program does allow cash out refis, but as you can see they do restrict it a little bit more'cause they're really more about home ownership in the purchase side. But here, uh, with a 740 plus credit score, 740 is the minimum credit score to be able to attain 70 percent LTV on the cashout 8. 875 is the rate at a cost of 1. 75 points. And our next cash out option is at the next credit tier. In this case, 700 to 739 will get you 65 percent LTV on this cash out refi for your primary and second home. 8. 25 is the rate at 1. 75 points. And our last example here is our cash out refi at the 660 to 699 credit tier. That is the lowest credit tier for this product, for the cash out refi. 60 percent LTV is the maximum LTV available at that credit tier. 8. 875 is the rate. At a cost of 1. 75 points. So some amazing examples here for this no income verification loan for primary and second homes as high as 80 percent LTV. All right, very interesting and amazing program there. I don't see any questions coming in, uh, so I think we'll go ahead and wrap it up. Jose, do you have any more examples of, of situations this might be, uh, good to use in? Yeah, I mean, we had, uh, an executive, uh, that was being paid with stock options that were going to mature in the, you know, not too far off future. But they really wanted to buy this really nice house, about 1. 4 million. And they didn't want to sell their current house. Uh, he, but, uh, in this case, uh, his credit was a little challenged, but the wife had a seven 60 credit. Uh, so we basically structured the transaction of the new home. Under the wife, um, closed on it. And then after they closed on the new 1. 4 million home, then they put the other home for sale. And this was all due to the fact that he was getting paid in stock options, that he were going to mature. He didn't have any kind of income at all. And in his case, he also had low credit. So we used the wife that didn't even have a job, but had amazing credit. I know also in, in terms of, uh, like crypto type people, right. Yep. Uh, we've, uh, Nick has financed a few of those crypto type borrowers where they have, uh, you know, plenty of crypto assets, uh, just no income that they're declaring. So, you know, as long as you have for the 20 percent down and the anywhere from nine to 12 months reserves that's required, depending on your credit score, you're good to go. Obviously you need the credit score as well, but most of the crypto borrowers had no issue with the credit. The only issue they had was they were not reporting any income on the 1040. All right, great. All right, I still don't see any questions. So we'll go ahead and wrap it up Definitely appreciate everybody tuning in remember that we do this at 11 a. m Eastern every weekday where we go through the live rates and then a different loan topic So we'll be back tomorrow with a new topic. We'll see you tomorrow 11 a. m Eastern for the next episode of daily rates live with the mortgage calculator