💵 How to Get a Second Mortgage Without Refinancing | Daily Rates LIVE

💵 How to Get a Second Mortgage Without Refinancing Your First Loan
Discover how homeowners can access extra funds through a fixed-rate second mortgage without touching their first loan. We’ll explain eligibility, CLTV limits, and payment structures. Watch a live quote example: $500K home with a $300K first mortgage and $75K second, showing combined payments and CLTV. A smart solution for renovations, investments, or other funding needs while keeping your low first-rate mortgage.
 📌 Key takeaway: Borrowers can access extra funds while keeping their first mortgage intact.
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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 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

SPEAKER_00 0:12

Hello everyone. Welcome to Daily Rates Live with the mortgage calculator. My name is Nick Hershey. I am the president here. And we are a licensed lender and broker in over 20 states. And we have over 100 loan officers that would be happy to help out anyone out there looking for a quote. And what we do every day is review the markets. Lots of news, obviously, here, uh, hopefully in our favor today. And uh we'll check out our live rates uh for this morning. I just pulled it up a minute ago, and then we'll do a deep dive into an example. And today we'll be talking about fixed rate second mortgages. So for our borrowers that don't want to touch their first mortgage, uh, they can still get quite a bit of cash out, lots of equity built up around the country, and lots of uh looser restrictions. These change every day. Uh, we can even do up to a million dollar second mortgage here, which is was, I should say, pretty unheard of uh not too long ago. So let me go ahead and switch my screen and we will check out the rates for today. And as usual, what we want to check out uh when we're talking about rates in general is going to be the 10-year uh treasury yield that's going to track the closest with uh mortgage rates overall. Uh so you see here definitely some news in our favor finally. So a little bit of a downward trend, which is great. And if we pull this out into the long term over the last year, well, you see here we're coming back into uh where we were just a month ago here at uh most recent lows. So great time to be out there shopping. Hopefully everything continues to trend in our favor. Now let's see what that really means for live rates. We go to our website here on our live rates. You can just click today's rates to see the same page. We pull up a standard scenario so we can compare the lowest rate options for all the different standard loan programs. We uh set up a scenario with a standard one-unit single-family home, a 500,000 purchase, 300,000 loan amount. That's a 60% loan to value, 760 credit score, and 40% debt-to-income ratio. That way we can compare across all the programs the lowest rate options. So, first up are conventional options for a primary home, 30-year fixed loan, what most people think when they think of a mortgage here, 6.125 rate, final APR 6.389, about the same as it was yesterday. Hopefully it continues uh to drop there. And if our customer doesn't qualify for a conventional option, we typically want to present a possible FHA option, which allows more leniency on credit issues, a little higher debt to income ratio, but does require a front-end yearly mortgage insurance. So the rate is great, 5.5, lowest rate option. But when you add in the upfront-end yearly mortgage insurance and all the costs, final APR comes in 6.410, just a touch higher than conventional. And if our borrower qualifies for VA, VA programs are pretty amazing here. You can see a 30-year fix standard VA option comes in at 5.624 today, but with the much lower fees overall, final APR 5.892. Definitely a great option, typically the best option for our eligible borrowers. And USDA for properties in USDA areas, those rural areas of the country, the properties eligible and the borrower is eligible. These options are pretty good to compare. 5.49, lowest rate option, final APR 6.198. Just a touch cheaper than FHA or conventional for borrowers comparing both options. And our non-QM options, which is one of the things we'll be talking about today, our non-QM second mortgages. Uh but these are our non-QM first mortgages for a primary home, uh, where we can use alternative docs. So we can use bank statements, 1099s, all kinds of different options to help our self-employed borrowers out. Uh, where they may not qualify for conventional or FHA or any of these standard programs, we can use alternative docs. And rates as 6.125, final APR 6.399, almost identical to conventional. Uh so we always get excited when non-QM is almost identical to conventional, really helps our self-employed borrowers out. And we can use alt docs for investment properties, a little bit higher rate there, 6.25 when we go to investment, and final APR comes in 6.576. And we can compare that to the conventional options for an investment property. When you switch conventional to investment, rates come in as low as 6.25, final APR 6.566. So just a touch cheaper than alt docs, which is pretty typical. And then we come to our favorite option here at the mortgage calculator, our non-QM option for DSCR, debt service coverage ratio, no income, no employment needed for our rental properties. We just use the estimated rents to determine a DSCR value. If the rents cover the expenses, that's our ratio over one, which is what we set here, along with a three-year prepayment penalty, which is pretty standard. Rates come in at a smoke in 6.125, final APR 6.448 beating conventional, which is amazing. And we can add a five-year prepay. We get super low rates here, 5.875, much lower than conventional. Final APR 6.193. Uh so this is an amazing option when our DSCR uh can come in and beat conventional on when we add some of these special options. And if we scroll down here, our topic for today, well, first off, our DSCR with no prepay comes in at 6.25, final APR 6.576, almost identical to conventional. So I'd say uh most, if not all investors would still choose a DSCR option, uh comparing it to conventional, as the rates are almost identical even for no prepay. Uh, but our topic for today, our second mortgages. Uh so here is our lowest rate option. So that will kind of segue into uh my demo today, which is going to be the maximum cash out. Uh but if our borrower doesn't want to touch their first mortgage and wants to get a second mortgage to access some of that uh cash built up in equity for a primary home, we can get our fixed rate second mortgage, 30-year fixed option, coming in at 7.625, lowest rate option, final APR 7.874 in that example. And if we switch that to an investment property, our second mortgages can get as low as 8.25 rate, final APR 8.620. So that will set up our transition into our example today. Uh well, I'll actually show uh a live example. So I always want to pull up an example property here. That's why I pulled up Zillow, this home is for sale, our great home here uh nearby me. But uh in this case, if our customer wants to purchase it, great. Uh but in this example we'll be uh refinancing, obviously, if with a second mortgage. So if perhaps this home doesn't sell or the sellers didn't need to actually uh sell to access that equity, uh here we can set up an example scenario where they have a put in these uh demos at 600,000 uh first mortgage, uh and if they're selling at 1.2 million, they're looking to access, you know, maybe 600,000 in uh equity that they're trying to use for something else. Uh but if we can get them some cash out with the second mortgage, maybe they can keep their first mortgage, get the cash they need, and solve whatever problem this sale is solving. So in this case, the first example, we're gonna use our non-QM fixed rate second mortgages. And this is going to be our one-year full doc example. Uh so these are all non-QM options that we're gonna look at today. Uh, this does use full documentation, uh, but just one year. And we can get up to a maximum amount of 90% combined loan to value. So for this exact home, if we have that first mortgage of$600,000 and a$1.2 million value, we can get up to$480,000 cash out. So almost as much as selling the property, and is my example here for these borrowers. Uh, they can access pretty much all of their equity if that's really what they're looking to accomplish. Uh, so this could be a good solution for our borrowers that we're considering selling. We can get rates as low as uh remember, this is maxing it out on the LTV, so a little bit higher rates than what you saw as our lowest rate option. Uh, but to get the maximum cash out, we can get rates as low as 8.75, has a cost of 2.375 discount points. And we have an option here, 9.625 rate actually gets us a little bit of credit towards closing here, 0.625 credit uh towards our closing cost. So a few different options there for our primary home borrower. And uh I did set that with a 600,000 first mortgage, 480,000 second mortgage to get that 90% combined loan to value. And we did use that 760 estimated credit score that we use for all the demos. Now there's a few other ways to set this up. Uh so if this is a primary home, obviously this full doc option is a great option. But if our borrower needs a little help with documentation, we can still do this primary home and still access the uh maximum 90% CLTV uh cash out using 12-month bank statements. So these are for our self-employed borrowers that may not qualify for a standard loan or a standard HELOC. Many times HELOCs uh require full documentation. This allows us to use our non-QM 12-month bank statement option for this second mortgage. And to take it to the maximum CLTV, a little bit higher rates here because we're using bank statements. 9.375 lowest rate option for 2.25 cost. And there's an option with a little bit of lender credit here, 10.25 rate, forget us a little bit of lender credit, 0.125 there. Uh so a great option for our borrowers that may not qualify for a standard HELOC or any other second mortgages, but can still access that uh pretty amazing amount of equity uh that this borrower may have built up there. And we did set business bank statement 12 months as the income type. This was a primary home, and again, that's 760 credit score. And now for our final demo, if this is actually a rental property for our owners, uh, which obviously we don't know just from the property listing, uh, we can use our bank statement option for an investor, and this allows us to go up to 80% CLTV is the maximum when we switch this to uh investor occupancy. Uh that 80% CLTV allows us to access$360,000 in cash if we have that same first mortgage. But you see here, because of lower LTV, some pretty actually amazing rates, even though it is set to investment here. So uh 8.375, lowest rate, 3.25 discount points in cost. And uh we can go up to 9.25 rate. Get a little bit of lender credit there, 0.25 and lender credits. And uh again, this was a 360,000 second mortgage, that's$600,000 first mortgage. We use business bank statements, switch this over to invest my property, uh, and 760 FICO credit score. So second mortgage is still a great option out there uh for our borrowers to access that equity, still record equity built up around the US. So great program for anybody out there that maybe consider selling or just needs to access cash. Uh, we can also do some pretty amazing options with our DSCR type of income, which means no income or employment information needed at all. And that will be the topic uh for later this week for our DSCR second mortgages. So thanks everybody for joining us. Please reach out or go to our website if you'd like a quote for your exact scenario. Have a great day.