West Nine Condos Laguna Niguel

Investment Loans Mortgages for Rentals

INVESTMENT LOANS

MORTGAGES Non Owner Occupied

There are so many ways to purchase or refinance real estate today. Investment loans (called non owner occupied) by lenders are far more expensive than they were four months ago. Fannie Mae and Freddie Mac (our government) pulled out of purchasing non owner occupied loans for many reasons. 

At this point in time I expect this trend will continue a couple years.       

I'm going to discuss the mortgage products out there today.

 

                                                                                                                    

  Investors are paying pricing adds or points to cover the risk a lender has who must either hold the loan for years until they find a buyer or portfolio them long term. It costs about seven thousand dollars to originate a mortgage with the hundreds of checks, many people who review the file, and costs for services. Lenders are charging 2.75-3 points (points are a percent of the loan amount) upfront to hedge in case the loan is paid off early which disrupts planning and costs the lender. The points today are in reality an upfront prepayment penalty.                                                                                                                                                                                                                                                                                                

There are MANY programs for investors to qualify. If your bank said no, it might be that they don't want to hold for the long term risk of keeping a lower rate mortgage against the rising tide of future higher rates. Or it might be they only have one set of rules with bank overlays.                                                                                                                                                                                                                                                                              I'm going to describe what is available today starting with the lowest rate without actually quoting rates as they are a moving target, subject to your middle FICO score, vary by property type, loan to value, and qualifying back end debt to income ratio.

A full documentation loan that meets the county conventional loan amount is the cheapest. Borrowers need two years IRS taxes (2019 2020 today) -all returns personal, LLC, partnership, S-Corp; a year to date 2021 profit and or loss from CPA; bank statements all pages past 60 days; identification current; paychecks past 30 days; rental agreements if differ from taxes; mortgage bills; property insurance bills, HOA bills; w-2, 1099 or 1098 past two years; award letters for pension/social security; divorce papers if applies. Borrower's credit is pulled and middle lowest FICO applies to pricing. Back end ratio cannot exceed 43. 620 score middle minimum

Next product same as above but is called high balance loan which varies by county

Next product is FHA on 2-4 units same documentation above with 590 middle score

Next is one year IRS return plus all the assets and 2020/2021 income documentation above. 660 score middle score minimum

Next Bank statement programs. Either 24 or 12 months bank statements are provided; identification; mortgage bills; property insurance bills; HOA bills;   deposits into ONE bank account are used, depends on end lender to calculate income there are four methods, call me... it's tricky Middle FICO 620

Next Asset Depletion loans. All liquid asset statements past two months; identification; FICO middle 680 this is for those who have checking/savings/401k/ IRA as excessive amounts. Asset depletion can be layered with some income documentation items that continue 36 months

Next Debt Service Ratio. Property is looked at as a stand alone source for qualifying. Rental income verified by appraiser/ survey/ payments  are used against the proposed principle, interest, taxes, insurance and HOA

Next hard money/ portfolio. The property is looked at from the eyes of lender who may want to own subject with lots of equity.

Next seller financing and other ins and outs. Lots of variety

Many Bigger Pockets investors like to ask about HELOC's but they are extremely difficult to find today for investment properties. You need 720 middle FICO and they are full documentation. Today there are two places that will fund a HELOC on non owner occupied property. A HELOC can be changed, rescinded, closed, and is subject to ongoing equity and credit worthiness of the borrower. They have low start rates with 18% cap.

This post does not discuss vesting which also is another layer of qualifying. Loans to LLC's are always priced much higher, let's leave that topic for another post.

I hope this helps you find mortgage loans that fit your investor dreams!

Call me for questions (949) 784-9699

C G Pacific time 7 AM to 7 PM

One Year Taxes Mortgage

 

Jumbo Mortgages

Credit scores starting at 660

Up to 90% LTV, No MI

• Loans up to $3 million, Minimum loan of $250,000
• Four years seasoning for foreclosure, short sale,
• bankruptcy or deed-in-lieu
• Owner-occupied, second homes,
• and non-owner occupied
• Purchase and cash-out or rate-term refinance
• Full doc only
• 40 year fixed interest only available
• One year tax return program
• Non-warrantable condos allowed

 

 

Refinance Now!

Fannie Mae's New Refinance Option Available

Beginning June 5, 2021
RefiNow™ Expands Eligibility to Help More Homeowners Reduce Their Monthly Mortgage Payment
(Applicable for Retail and Wholesale channels)

CLIENTS! HOMEOWNERS! People who didn't refinance because of something or other...

May 5 2021, introducing  Lender Letter 2021-10 the new government  RefiNow™ option to enable borrowers to refinance to a lower rate and reduce their monthly mortgage payment. With this program option qualifying homeowners whose earnings are no more that 80% of the Area Median Income (AMI) will be eligible to refinance their Fannie Mae-owned loans to a lower interest rate and a corresponding lower monthly mortgage payment.

The RefiNow™ program option starts June 5, 2021.

Sun West Mortgage Company, Inc. is offering RefiNow™ loan program with an application date on or after June 5, 2021.

RefiNow™ helps the borrower by:

• Requiring a reduction in the homeowner's interest rate by a minimum of 0.5 percent and a savings of at least $50 in the homeowner's monthly principal and interest payment.
• Providing a $500 credit from Fannie Mae to the lender at the time the loan is purchased if an appraisal was obtained for the transaction. The lender must pass this credit to the homeowner after closing. Some transactions do not require an appraisal and this discount will not apply if no appraisal is needed.
• Waiving the 50-basis point up-front adverse market refinance fee that Fannie Mae otherwise charges to lenders on balances at or below $300,000. This discount is sizable money on a mortgage.

To qualify for RefiNow™, the borrower must have:

• a Fannie Mae-backed mortgage secured by a 1-unit, principal residence;
• a current qualifying income at or below 80% of the Area Median Income (AMI);
• not missed a mortgage payment in the past six months, and have no more than one missed mortgage payment in the past 12 months; and
• a mortgage with a loan-to-value ratio up to 97%, a debt-to-income ratio of 65% or less, and a minimum FICO score of 620.

Median income limit minus 20% to qualify for this mortgage product. Let's get your monthly payment down on your home loan!

Call me now (949) 784-9699

this is not a commitment to lend

FHA loan limits are derived from the loan limits adopted by the Federal National Mortgage Corporation (Fannie Mae-FNMA) and the Federal Home Loan Mortgage Corporation (Freddie Mac-FHLMC). The 2021 maximum conforming loan limit for a single-family home will be $548,250. That’s an increase of $37,850 from the 2020 baseline limit of $510,400. This marks the fifth year in a row that federal housing officials have raised the baseline.

LOW-COST AREA OR FLOOR

The FHA national low-cost area mortgage limits, which are set at 65 percent of naäonal
ming limit of $548,250 for a one-unit Property, are, by property unit number, as follows:

• One-unit: $356,362 (FHA limit can be this low AKA the Floor)
• Two-unit: $456,275
• Three-unit: SSS1,soo
• Four-unit: $685,400

HIGH-COST AREA OR CEILING

The FHA national high-cost area mortgage limits, which are set at 150 percent ofthe national ming limit of $548,250 for a one-unit Property, are, by property unit number, as follows:

• One-unit: $822,375 (FHA limit can be this high AKA the Ceiling)
• Two-unit: $1,053,000
• Three-unit: $1,272,750
• Four-unit: $1,581,750

SPECIAL EXCEPTIONS FOR ALASKA, HAWAII, GUAM, AND THE VIRGIN ISLANDS

Mortgage limits for the special exception areas of Alaska (AK), Hawaii (HI), Guam (GU) and the Virgin Islands (VI) are adjusted by FHA to account for higher costs of construction. These four special exception areas have a higher ceiling as follows:

• one-unit: $1,233,550
• Two-unit: $1,579,500
• Three-unit: $90,9125
• Four-unit: $2,372,625