This guide covers home mortgage case scenarios for homebuyers. Many borrowers have trouble qualifying for conventional and FHA mortgage financing. But that does not mean they are out of Hope. Gustan Cho Associates offers a full line of NON-QM loans! NON-QM loans help hundreds of potential home buyers purchase the home of their dreams.
Non-QM loan programs offer mortgages for borrowers who are self-employed, credit challenged, and recently out of a housing event such a qualifying for non-QM loans one day out of bankruptcy or a housing event.
Example of a housing event is a foreclosure, short sale, or deed-in-lieu of foreclosure. In this article, we will examine some common uses for the NON-QM loan products. In this article, we will discuss and cover home mortgage case scenarios for homebuyers. We will discuss challenges and hurdles of borrowers with unique situations and cover home mortgage case scenarios.
Home Mortgage Case Scenarios of First-Time Buyer with Stable Income
Scenario: Sarah is a recent college graduate who has just landed her first job with a steady income. She has been saving for a down payment and has good credit. She’s looking to buy a modest home in a suburban area. Mortgage Solution: Sarah qualifies for a conventional fixed-rate mortgage with a 20% down payment. She opts for a 30-year fixed-rate mortgage with a competitive interest rate. This allows her to comfortably manage her monthly payments while building equity in her home. Click here to apply for first-Time buyer for home mortgage
Self-Employed Buyer with Irregular Income
Scenario: Alex runs a successful freelance business with a variable monthly income. He’s been renting but now wants to buy a home in the city. Mortgage Solution: Alex may face challenges due to his irregular income. However, he can provide documentation such as tax returns and bank statements to demonstrate his earning potential. A lender may offer him an adjustable-rate mortgage (ARM) with flexible terms or suggest a larger down payment to mitigate the risk. Alternatively, he could explore specialized mortgage products tailored for self-employed individuals.
Military Veteran Utilizing VA Loan
Scenario: James is a military veteran looking to purchase a home for his family. He’s eligible for a VA loan due to his service record. Mortgage Solution: With a VA loan, James can purchase a home with no down payment, provided he meets certain eligibility criteria. VA loans typically offer competitive interest rates and don’t require private mortgage insurance (PMI). James decides to utilize this benefit, allowing him to buy a home with favorable terms and minimal upfront costs.
Buyer with Excellent Credit Seeking Jumbo Loan
Scenario: Emily and John have high-paying jobs and excellent credit scores. They want to buy a luxury home in an affluent neighborhood. Mortgage Solution: Since the price of their desired home exceeds the conforming loan limits, Emily and John need a jumbo loan. Lenders may still scrutinize their financial history despite their strong financial profile and require a substantial down payment. They opt for a 15-year fixed-rate jumbo loan to minimize long-term interest costs while comfortably managing higher monthly payments.
Buyer Recovering from Financial Setback
Scenario: David recently went through a divorce that impacted his credit score and depleted his savings. However, he’s now back on his feet and wants to buy a modest home for himself and his children. Mortgage Solution: David’s recent financial challenges may make it difficult for him to qualify for conventional loans.
Borrowers might be eligible for an FHA loan, which has less stringent credit requirements and allows for a lower down payment. Alternatively, a borrowers could improve credit score before applying for a mortgage to qualify for better terms and rates.
Each scenario illustrates how different factors, such as income stability, credit history, and specific needs, can influence the type of mortgage solution that best suits a homebuyer’s situation. Buyers must consult with a mortgage professional to explore their options and find the most suitable financing solution for their circumstances.
Home Mortgage Case Scenarios For Self Employed Borrowers
Example 1: Self-employed borrower who was turned down for DTI being too high on tax returns. Most self-employed borrowers take advantage of tax write-offs This can become an issue when trying to obtain a mortgage. Mortgage companies must calculate the ability to repay based on income provided to the IRS.
Gustan Cho Associates Mortgage Group offers bank statement loans available for Self-Employed borrower. If you have business bank statements, your income will be calculated based on a 24-month average.
If you use your personal bank account to conduct business, income will be calculated off a 12-month average. Please see Gustan Cho’s BANK STATEMENT BLOG for more information. If you feel you fit in this category please reach out to us at Gustan Cho Associates at 800-900-8569 or text us for a faster response. Or email us at alex@gustancho.com.
Home Mortgage Case Scenarios For Home Buyers With Recent Bankruptcy
Example 2- A client with a Bankruptcy discharge less than 2 years old or a foreclosure not seasoned 3 years. This is when we will use the recent housing event program. Borrowers can be one day out of foreclosure, short sale, deed-in-lieu, or bankruptcy.
At Gustan Cho Associates understands life isn’t easy at times. Families do go through financial hardships. Many need of home before the 3-year waiting period for FHA financing and 4 to 7 year waiting period for conventional loans.
Some Jumbo lending requires 8-year seasoning after a foreclosure! This loan program can be exactly what you and your family need to get back on track!. You can qualify for a mortgage one day after these events!! Talk to us about purchase home with recent bankruptcy
Home Mortgage Case Scenarios Qualifying For Loan With Low Credit Scores
Example 3- Borrowers have scores below minimum qualifying scores for FHA or conventional financing. Typically borrowers need to have a 580 or higher credit score to obtain an FHA loan. Yes borrowers can go down to 500 credit scores with a 10% down payment. But passing the manual underwriting can be complicated with such scores! NON-QM loans take a common-sense approach to underwriting.
Home Mortgage Case Scenarios on Jumbo Loan With Bad Credit
Example 4- Jumbo Loans with less than perfect credit score. This is one of the main areas NON-QM loan programs help our clients. Jumbo financing in 2018 is tough to obtain. After the housing crash of 2008 lenders are very cautious handing out jumbo financing. We offer NON-QM loans up to $3 million with credit scores as low as 600. We also offer NON-QM loans up to $1 million with scores down to 500! Please read that again, scores down to 600 for loans up to 3 million dollars!!! Our viewers who feel this can help your family, please read my blog on JUMBO LOANS WITH LOW CREDIT SCORES.
Investment Loans With High Debt-to-Income Ratios
Example 5- Buying investment properties with high DTI. Debt-to-income ratio requirements are very tough when purchasing investment properties We offer the Investor Cash Flow loan program! When income reported on tax returns to the IRS will not support conventional financing borrowers may want to look into this program.
Borrowers qualify for this loan program when the subject property Principal, Interest, Taxes, and Insurance (PITI) is 90% or less of the monthly rent collected. NO INCOME IS USED TO QUALIFY!
NO INCOME, NO JOB REQUIREMENTS, CAN HAVE UNLIMITED FINANCED PROPERTIES. Only need 20% down payment and a 660 credit score! Real Estate Investors may also close in an LLC as many investors vest their properties in such a manner. Example. If the subject property has a market rent of $2,000 a month verified on the appraisal, borrowers will be able to use $1,800 a month as income to qualify for that investment property. The income is solely based on the cash flow on the subject property.
Home Mortgage Case Scenarios For Alternative Financing With Non-QM Loans
Gustan Cho Associates is a national mortgage company with no lender overlays on government and conventional loans licensed in multiple states. Gustan Cho Associates are also experts in non-QM loans. These NON-QM loans open up homeownership to thousands of Americans! I am an expert in NON-QM lending. Please reach out to me directly for help with more specific questions, I will be able to assist you or assign you to one of my Associates on the Gustan Cho Team!
