Daily Mortgage Rates LIVE - 10/22/2024 - Foreign National Borrower Loans

In this episode of Daily Mortgage Rates Live, we’re shedding light on Foreign National Borrower Loans—a specialized lending option for non-U.S. citizens looking to invest in or purchase property in the United States. With real estate being one of the most sought-after investments, especially for international buyers, understanding the ins and outs of Foreign National Loans is crucial for both lenders and potential borrowers.

Are you wondering how the interest rates and down payment requirements for foreign national loans compare to those for U.S. citizens? What about legal implications, visa statuses, and tax considerations? This episode covers all of that, along with insights into why foreign investors are drawn to the U.S. real estate market and how lenders can seize this opportunity by offering tailored solutions.

Whether you’re an international buyer eager to get into the U.S. housing market or a lender seeking to understand the growing demand for foreign national loans, this episode provides the roadmap you need. Learn how to navigate this complex but rewarding segment of the mortgage market and help your clients achieve their property investment goals!

Tune in to discover how Foreign National Borrower Loans are opening doors for global investors and expanding opportunities in the U.S. housing market.

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 j

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 22, 2024 • 03:09:52 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 show is go through our actual live rates, and then we do a deep dive into a different loan type. And today's topic is foreign national loans. So, I'm going Let me go ahead and turn it over to Nick here. So first we can see what the rates look like today. So go ahead. All right. So today is October 22nd just after 11 a. m. So all of our standard programs have their initial rates for today. We'll compare across the program to be like a full breakdown and itemized loan estimate that breaks down all the fees that go into the APR that we're going to compare. Please get with our team members. They'd be happy to send that over. All right. We will set up a basic scenario so that we can compare equally across all the options. We'll set up a one unit single family home, 500, 000 purchase price, 400, 000 loan amount. That corresponds to 80 percent loan to value, 20 percent down payment. We'll use an estimated 760 FICO credit score and an estimated 40 percent debt to income ratio. So with those settings, let's check out the rates today. So first up, our 30 year fixed conventional for a primary home. Most common option people think of when they think of a mortgage. Rates today coming in at 6. 375. Final APR 6. 684. Bumped up a little bit there from yesterday. And if for any reason our customer doesn't qualify for a conventional option, we typically want to compare an FHA option, which allows more leniency on credit issues and a higher overall debt to income ratio. But does require upfront and yearly mortgage insurance. FHA comes in today, 5. 5 rate, final APR with all the fees and mortgage insurance, 6. 464. So if our customer qualifies for both, FHA could be a touch cheaper if they're willing to do the mortgage insurance. And if our customer needs to use FHA, definitely a good option. The APR is very comparable. Now, moving on to our VA option here. That's only for eligible vets and active service members. If you are eligible, these programs are great. As you can see, it's much lower rates than the other options. Rates as low as 5. 625. Finally, PR with a standard funding fee here, 5. 927. So, we compare that across the other options. VA is always going to be the best for our eligible borrowers. And we'll scroll down here to our final standard option here. USDA is only for properties in USDA eligible areas. So if the customer is eligible and the property is eligible, these are great to compare. Comes in today at 5. 625 rate. Final APR with all the fees, 6. 383. So it actually ends up being a touch better than FHA, which is typical, back to normal here. And better than conventional as well. So those customers looking in those areas, definitely check out USDA. Should be the best option for those rural areas. And that rounds out our standard options that most banks or lenders have. Now, if our customer doesn't qualify, unfortunately, many banks or lenders have to deny them, but that's where we have over 5, 000 additional options for non QM, starting with our alt doc options for a primary home. So if our customer doesn't qualify with standard documents for conventional and FHA, tax returns, et cetera, needs to switch to using alternative docs, switch here to alternative docs for the same rate, which is amazing rates as low as 6. 375 today. Final APR, 6. 707. So just a touch above conventional to switch to alternative docs, which is amazing. So our customer can still get that home they really want. And we can use Alt Docs for investment properties. So tons of options for investments. The first option for Alt Docs here, again, bank statement or similar rates as low as 7 percent today. Final APR, 7. 35. And we'll compare that to all our other options for investment properties. So we do have our conventional option here. Remember, there are no government options, so no USDA, FHA, or VA, but we do have this conventional for investments coming in today, 6. 875, final APR, 7. 211, which is a touch cheaper than AltDoc, which is typical, but not cheaper than our favorite loan options, our DSCR, stands for Debt Service Coverage Ratio. No income information needed, no employment information needed. We simply use estimated rents from the appraisal to determine a DSCR ratio. The estimated rents cover the expenses. That is a positive DSCR ratio over one, aka the property cash flows monthly. For those options that have a DSCR ratio over one, and we add a three year prepayment penalty. Rates today come in at 6. 499, final APR 6. 835, beating conventional by quite a bit. That is amazing. And we can sweeten the deal even more with a five year prepayment penalty allowed on some programs. Rates today come in at 6. 375, final APR 6. 707, again, beating conventional by quite a bit. Great option. And the final DSCR we do in our demo here is a no prepayment penalty option, as some states don't allow a prepayment penalty and some investors prefer not to have one. Great option here though. Rates come in at 7%. Finally, PR 7. 337, almost identical to conventional. I'd say a hundred percent of investors would use a DSCR when the prices are this similar and even when they're much higher. And our final options here are 30 or fixed second mortgages. These are great options for borrowers who may have lower rates than what we're looking at now. and still need to access equity. So typically the traditional option is a HELOC, which is an adjustable rate mortgage, uh, much higher rates than we see here. So our alternative to that is our 30 year fixed, fixed rate mortgages, second mortgages, and this is on a primary home. Our primary borrowers can get rates as low as 8 percent to get that cash out. Final APR 8. 384. And again, these are fixed and not adjustable and much lower rates than HELOCs. And he locks are very rare for investment properties. So these are great options for our investors. The 30 year fixed second mortgage, get cash out of that investment property rates as low as 9. 3 75 finally PR 9. 7 for six. So let me go ahead and switch into our topic for today. Just like yesterday, uh, we don't get to adjust the, uh, citizenship type to special citizen types when we're doing our live demo here. Uh, so everything we're looking at was for a standard U S citizen. Okay. But we also have options under a few different programs for true foreign nationals. So yesterday we did I 10s Which is not a foreign national today. We're going to talk about a true foreign national So Jose, let's define foreign national first and then check out our options. Good morning, everybody Thank you for joining us for daily mortgage rates live with the movies calculator. Yes yesterday We went over i 10 which is commonly confused with foreign national borrowers because they both do not have legal status to reside full time in the U. S. The difference is that the foreign national borrower resides outside the U. S. permanently. If income is being used, they also derive their income outside of the U. S., and unless specifically noted in the guidelines that you may be considering, the foreign national is also not required to have U. S. based credit. Uh, four nationals can purchase full doc or D. S. C. R. And they can also purchase second home, uh, or, um, investment. So let's go into the options that we have for you today. We have some great for national options. 75 percent is the maximum L. T. V. On our four national loans. And here we're looking at 8. 3, 7, 5 is our lowest cost option with a lender credit, which is nice to see a 0. 025 points. And you can buy this down all the way to 5 for our DSCR option, which you will see is the lowest rate and lowest cost option, because frankly, I believe that underwriters are going to feel more secure at verifying the income that the property is generating from the rental as opposed to the foreign nationals income country of origin. And that situation you can see right here in that The full dock purchase also, also 75 percent LTV investment lowest cost option there is 9. 375 substantially higher than the DSCR option and our lowest rate option is 8. 25 at a cost of 3. 5 points. And now for our, uh, for national full doc, second home purchase 9. 25 is our lowest cost option at par. And you can buy that down all the way to 8. 5%. Please note also that in our second home options, you're going to see the pricing is also a little worse than the other options because, uh, being a second home, uh, you're not permitted to add a prepayment penalty. So now our cash out refinance options, 70 percent is the maximum LTV for, for national loan. Cash out refinance transaction. And here, our first option is our full doc option. 9 percent is our lowest cost option at par. And we can buy that down all the way to 8. 25 at a cost of 2. 25 points for our second home full doc cash out refinance at 70 percent LTV for our foreign national. Our next option is our full doc cash out of the investment property. Now, this one has a three year prepayment penalty added to it. 9. 125 is our lowest cost option at par, and you can buy that down all the way to 8 percent at a cost of 3. 375 points. And our last option here. Is our DSCR cash out refinance 9. 125 is our lowest cost option at par. And you can buy that down all the way to 8% at a cost of 3.375. So remember the avenues that are available for your foreign national borrowers, the SER investment purchase or uh, second home purchase. All right. Let's see. Do we have any questions here? It looks like we do have one question. I'm not sure exactly. So the question is, are these all workers? I'm not sure exactly what that means, but do you just want to touch on employment in, in general, Jose? Yup. Um, the full doc loans, uh, when we're verifying full doc for a foreign national, uh, what we have to consider is, are they self employed? Or are they an employee? If they're self employed, we will request, uh, it will require a letter from their accountant, from their country of origin stating the income for the last two years, the year to date income, their percentage of ownership in the business and the name of the business and when the business was established. If they are an employee of a company, we will send a letter, which is similar to the letter that we send, uh, for the self employment where the employer will basically complete the letter stating their income for the last two years, year to date income, name of the company, and it'll be on the company letterhead. So those are, those are the two scenarios for employment and keep in mind that we actually can, uh, offer second home option for foreign national, but. To be aware that the second home option does not allow a prepayment penalty. All right I don't see any more 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, then we do a deep dive into a different loan type So we'll be back tomorrow with a new loan type. We'll see you 11 a. m Eastern tomorrow for the next episode of daily rates live with the mortgage calculator. Have a great day everyone