Stated-income loans are back

By Jeff Lazerson

8/11/17

What’s up with mortgage rates? Jeff Lazerson of Mortgage Grader in Laguna Niguel gives us his take.

Rate news summary

From Freddie Mac’s weekly survey: The 30-year fixed rate improved, averaging 3.90 percent, three basis points better than last week’s 3.93 percent. The 15-year fixed was unchanged at 3.18 percent.

The Mortgage Bankers Association reported a 3 percent increase in loan application volume from the previous week.

Bottom line: Assuming a borrower gets the average 30-year fixed rate on a conforming $424,100 loan, last year’s rate of 3.45 percent and payment of $1,893 was $107 less than this week’s payment of $2,000.

What I see: Locally, well qualified borrowers can get the following fixed-rate mortgages at one point cost: A 15-year at 2.75 percent, a 30-year at 3.50 percent, a 15-year agency high-balance ($424,100 to $636,150) at 3.0 percent, a 30-year agency high-balance at 3.75 percent, a 15-year jumbo (over $636,150) at 3.5 percent and a 30-year jumbo at 3.75 percent.

What I think: My head is spinning! I have so much home financing news that you can use from this week’s summer CAMP (California Association of Mortgage Professionals) convention on Coronado Island.

First and foremost, owner-occupied stated-income loans for purchases, refinances and cash-out refinances are back!

If you can cough up a one bank statement, you have been self-employed for at least two years, have at least a 700 middle credit score, no icky credit events, a 30 percent down payment or remaining equity of 35 percent for refi’s, borrowing anywhere from $250,000 to $3 million on a single unit, owner-occupied property, and you are willing to attest and declare your income, you might be good to go.

No first-time buyers and there are a few other guidelines.

No Social Security number? Forget about it. Go get yourself an ITIN (individual taxpayer identification number) from the IRS and put 30 percent down to get a loan for up to $2 million. No FICO scores needed.

ITINS are for people who have tax filing or income reporting obligations under U.S. law but are not eligible for a Social Security number.

Do you want to unlock some home equity to start a business, pay off your hard money second lien or any second for that matter but are having a tough time qualifying? Not to worry.

One investor will provide you a second lien with absolutely no payments for up to 30 years, so long as the combined first and second loans equal 75 percent or less of the property’s value. You do need a minimum FICO score of 680 and a maximum 50 percent debt ratio.

Sell anytime you want. The catch is that the investor participates in the property appreciation when you sell. Alternatively, there is a three-year buyout option. Believe it or not, if your property value falls, the investor participates in the loss as well. Oh my goodness!

Have at least 5 acres (executive estate or not) with livestock or maybe a horse arena, fruit bearing trees or some other crops? You can get a farm or ranch purchase or refinance loan with a minimum of 30 percent down or 30 percent equity, providing monthly, semi-annual or annual payments for up to $5 million or more.

How about down payment assistance? One portfolio investor offers low-to-moderate-income borrowers a 3 percent down payment loan. You come up with just 1 percent down. The investor gives you the other 2 percent down as a second lien, with that 2 percent forgivable after three years.

The rate is 4 percent and there is no PMI.

Happy home financing from CAMP!

If you have questions or comments, please contact Jeff Lazerson by clicking here.