Alex Carlucci The Mortgage Expert,
Publish On: June 17, 2024
In this blog, we will discuss and cover non-QM and bank statement portfolio loans for owner-occupant, second homes, and investment properties. NON-QM And Bank Statement Portfolio Loans are mortgage loans that do not conform to Fannie Mae or Freddie Mac lending guidelines. NON-QM And Bank Statement Portfolio Loans are mortgage loans that are held by the lender’s own portfolio. Homebuyers can qualify for home loans one day out of bankruptcy and foreclosure with NON-QM loans. Bank statement loans are mortgage loans for self-employed borrowers who have a lot of unreimbursed business expenses. No income tax returns are required.
Bank Statement Loans For Self-Employed Borrowers
Bank Statement Loans For Self Employed Borrowers now makes business owners and self-employed borrowers qualify for home loans with no tax returns. Income is derived by the average of the past 12 months’ bank deposits and not withdrawals. A 20% down payment is normally required. We do offer 10% down payment NON-QM Loans but borrowers need 680 FICO Credit Scores.
Mortgage Rates on Non-QM Loans
Mortgage Rates are higher on NON-QM And Bank Statement Portfolio Loans. Non-QM mortgage rates are determined by the lender’s layered risk factor. The lower the credit scores, the higher the risk, the higher the rate. The lower the down payment, the higher the risk because no skin of the game by the borrower therefore the higher the mortgage rate.
Terms Of NON-QM and Bank Statement Portfolio Loans
Most portfolio loans are adjustable rate mortgage products ( ARM ) that are amortized over 30 years. There are 30-year fixed rate Non-QM and bank statement portfolio loans available. They are not balloon mortgages and are 30 year amortized mortgage loans. For example, a 7/1 ARM loan has a fixed mortgage rate for the first 7 years and adjusts every year for the remaining 30 years. Portfolio loans are based on an index plus a margin. The margin is always constant and the index is based on either the Libor, COFI, CMT, or other indexes the portfolio lender decides on prior to issuing the mortgage loan commitment. Speak With Our Loan Officer for Mortgage Loans
Condotel Financing
Condotel mortgage loans are portfolio loans that are very popular. Condotel financing is one of my specialties. Gustan Cho Associates offers condotel purchase, condotel refinance, and condotel cash-out refinance loans. Minimum credit score requirements for condotel mortgage loans for condotel mortgage loan borrowers are 680 FICO.
No late payment history in the past 12 months. The maximum loan to value is 75% on condotel purchase loans, condotel refinance loans, and condotel cashout refinance loans for first and second homes.
The condotel unit needs to have at least one bedroom and a functional kitchen in order to qualify. Condominium Units need to be at least 500 square feet. The condotel project has to be financially sound and cannot have any current major building violations nor any pending major lawsuits
Investment Condotel Financing
For investment condotel financing, the maximum loan to value requirement is 60% LTV. The 60% loan to value requirement is for investment condotel purchase loans, investment condotel refinance loans, and investment condotel cashout refinance loans.
Non-Warrantable Condo Portfolio Loans
We offer non-warrantable condo portfolio loans throughout the United States. The maximum loan to value for non-warrantable condo portfolio loans is 80% LTV. They are 30-year adjustable rate mortgages. There are 3/1 ARM, 5/1 ARM, and 7/1 ARM portfolio loans and the index is based on the one year CMT and the margin is set at a constant 3%. There is no prepayment penalty. Minimum credit scores for non-warrantable condo portfolio loans is for the borrower to have at least a 680 FICO score. Borrowers maximum back-end debt to income ratio for the mortgage loan borrower cannot be greater than 45%. Non-warrantable condo portfolio loans are extremely popular throughout the United States. Click here to apply for Non-Warrantable condo portfolio loans
Properties That Cannot Get Conventional Financing
Borrowers who cannot get conventional financing, NON-QM and bank statement portfolio loans may be the route to go. There are many reasons why borrowers might not qualify for a conventional loan. It may be because of the property or it may be because of the mortgage loan borrower does not qualify for a conventional loan. Portfolio loans are mortgage loans held by the lender and not sold on the secondary market. NON-QM and bank statement portfolio lenders are much more lenient and open-minded when qualifying the mortgage loan borrower or the subject property. Homebuyers who need to qualify for NON-QM and bank statement portfolio loans, please contact us at Gustan Cho Associates at 800-900-8569 or text us for a faster response. Or email us at gcho@gustancho.com. We are available 7 days a week, evenings, weekends, and holidays.
FAQs: NON-QM and Bank Statement Portfolio Loans
1. What are NON-QM and Bank Statement Portfolio Loans? NON-QM (Non-Qualified Mortgage) and Bank Statement Portfolio Loans are types of mortgage loans that do not follow the lending guidelines of Fannie Mae or Freddie Mac. These loans are kept in the lender’s portfolio and can be utilized for owner-occupant, second-home, and investment properties.
2. Who can benefit from NON-QM and Bank Statement Portfolio Loans? These loans are ideal for homebuyers who must qualify for a mortgage shortly after bankruptcy or foreclosure. They are also beneficial for self-employed borrowers with significant unreimbursed business expenses.
3. Do I need to provide tax returns for Bank Statement Loans? No, bank statement loans do not require income tax returns. Instead, income is derived from the average of the past 12 months’ bank deposits.
4. What are the requirements for Bank Statement Loans for self-employed borrowers? Typically, a 20% down payment is required. However, a 10% down payment option is available for borrowers with a 680 FICO credit score.
5. How are mortgage rates determined for NON-QM Loans? Mortgage rates for NON-QM loans are higher than conventional loans. They are determined by the lender’s assessment of risk factors, including credit scores and down payment amounts. Lower credit scores and smaller down payments result in higher rates.
6. What are the terms of NON-QM and Bank Statement Portfolio Loans? Most loans are adjustable-rate mortgage (ARM) products, amortized over 30 years. There are also 30-year fixed-rate options available. For example, a 7/1 ARM has a fixed rate for the first 7 years, adjusting annually afterward.
7. What is Condotel Financing? Condotel financing is related to mortgage loans for condotel units, essentially condominium hotels. Such loans can be used for purchasing, refinancing, or cash-out refinancing. Usually, condotel loans require a minimum credit score of 680 FICO.
8. What are the requirements for Condotel Financing? The condotel unit must have at least one bedroom and a functional kitchen, be at least 500 square feet, and be part of a financially sound project with no major building violations or pending lawsuits. The maximum loan-to-value (LTV) is 75% for first and second homes.
9. What are the requirements for Investment Condotel Financing? The maximum LTV for investment condotels is 60%. This applies to purchase, refinance, and cash-out refinance loans.
10. What are Non-Warrantable Condo Portfolio Loans? These are loans for condos that do not meet conventional financing criteria. They are adjustable-rate mortgages with 3/1 ARM, 5/1 ARM, and 7/1 ARM options. The index is based on the one-year CMT with a constant margin of 3%. There is no prepayment penalty, and borrowers need a minimum 680 FICO score with a maximum back-end DTI of 45%.
11. What should I do if my property cannot get conventional financing? If you cannot get conventional financing, NON-QM and bank statement portfolio loans may be an alternative. These loans are more flexible with borrower qualifications and property types.
12. How can I contact Gustan Cho Associates for more information? You can contact Gustan Cho Associates at 800-900-8569 or email gcho@gustancho.com . They are available 7 days a week, including evenings, weekends, and holidays.
This blog about NON-QM and Bank Statement Portfolio Loans was updated on June 17th, 2024.
