We have some exciting news to share with you! Starting November 1st, 2018, we will be offering bank-statement loans with only 10% down up to $3 million. To make this opportunity even more exciting, real estate is now eligible for asset utilization during approval. This is something that is rarely done; in fact, we’ve never seen a bank offer this before, making it a truly unique opportunity!
Bank-Statement Loans with Only 10% Down for Financing Up to $3 Million
In most cases, large loans require large down payments. We’re not talking large totals, although that is a factor; we’re specifically talking about large percentages of the property’s value. With other loan options, you can get the money you need for a purchase with as little as 3.5% down; in some cases you can get the loan with 0% down. With large loans totaling millions of dollars, however, you are usually required to bring down payments as high as 30%. That’s $300,000 for every $1 million in property value; a property of $3 million would require $900,000 in a down payment!
With this loan option, you still have to bring a sizable down payment, but it’s far less. For a $1 million purchase, you would have to bring a down payment of $100,000. That’s not loose change for anyone, but it’s far more attainable than the previous numbers.
Other Highlights from the Announcement
No Credit Events for Past Three Years Instead of Four or More
A “credit event” is essentially a negative occurrence on your credit history. Many situations can fall under the umbrella of this term, but they most often include a default, bankruptcy, or debt restructuring. However, having a single late payment on your credit score is rarely considered a credit event.
Previously, to be eligible for bank-statement loans, you could not have had a credit event in the past four years; in some cases more. However, with this program that has been reduced to three years.
Real Estate Now Eligible Asset for Utilization
Known in the industry as REO, for “Real Estate Owned,” this is essentially property that you own, whether or not you have a mortgage on the property. This is now eligible to be utilized as an asset for loan qualification. Essentially, if you have a property that you own that still has a mortgage, you can claim the property as part of your assets. However, if there is a mortgage, you still have to factor your payments and debts when applying for the loan.
Cash-Out Refinancing Now Allows Up to $1 Million
Cash-out refinancing is an effective way to use equity in your home to get cash that you can use for a wide variety of purchases. Although it is often used for essential home repairs, it’s possible to use refinancing for other needs, such as investments.
Starting in November of 2018, you can now use cash-out refinancing for up to $1 million, making this a great way to acquire the money you need for various purchases.
DTI Requirement is 50%
Debt-to-income ratio, or “DTI” is an essential part of loan qualification. Lenders want to see that your income is not overly consumed by debts, and, depending on the loan, they will have various restrictions for this ratio. Usually DTIs around 40 to 45% will cause lenders to reject the loan, but with this program you can get a loan with a DTI of 50%. This comes without any additional restrictions, making it a top advantage for borrowers.
12-Month Business Statements Are Eligible
Another highlight of this new announcement is that you can use 12 months of business statements for approval. You won’t have to dig up years upon years of business information to be approved; you’ll only need a single year. This makes approval much more convenient, and can be the difference between approval and rejection for many borrowers.
Express Docs Now Allowed for Wage Earners
To make the process faster and more convenient, express docs are now eligible for the wage earners on the loan. Talk to your lending professional for information on using this option.
Blended Ratios Allowed with Non-Occupant Co-Borrowers
Non-occupant co-borrowers can be important for mortgage applications, but there can be differences in the credit profile of the main borrower and the non-occupant. For example, the main borrower might have a DTI of only 10%, while the non-occupant co-borrower could have a DTI of 55%. Loans to a borrowers with a 55% DTI are rarely allowed by lenders, so this could disqualify the non-occupant, whose income could be essential for approval.
With this program you have the option of blending ratios to increase your chances of approval. Essentially, the ratios are mathematically combined and the DTI used for approval is somewhere in the middle. For example, if the main borrower has a $10,000 monthly income and $2,000 in monthly debt, she has a DTI of 20%. The co-borrower has a the same income but $5,500 in monthly debt, for a DTI of 55%, which may disqualify them from many loans. However, when you combine the two, you have a total monthly income of $20,000 and monthly debts of $7,500, for a DTI of 37.5%. This blended ratio, which is well within the bounds of many loans, can then be used for approval.
Bank Statement Calculation Allows for Expense-Ratio Option
The expense-ratio option can be used for approval, and with this new program, you can use bank statements in your calculation. Expense ratio is a calculation of how much a fund’s assets are used for operating expenses, and it’s an important number for lenders. This option could create borrowing options for many different borrowers.
Proudly Supporting Your Real Estate Goals Through Top-Quality Loans
Want to find out about $3 million loans with only 10% down? Contact San Diego Purchase Loans today to learn how you can get the right loan for your specific needs. From jumbo loans with low down payments to affordable loans for moderate housing, we are ready to help achieve your real estate dreams!
“Hi Juliann and Chad, I wanted to take a moment and thank you guys for what would have been impossible for us to do without you. We wouldn’t have our keys in hand if it had not been for your help in navigating the financing, and Juliann’s perseverance in getting the rest of the players in the transaction to deliver. Out of everything, our interaction with your office has been a highlight – and your customer service has been beyond everything we’ve experienced in the real estate industry. Is there a way we can provide any reviews, ratings, testimonials, or other statements that can express to your potential future customers how much you guys do to make the customer’s life easy? Please let us know how we can share our great experience with you to the rest of the public. Whether we refinance this under a VA, or get in a bigger/better house in a few years, we’re not going to go anywhere else for financing. We are customers of yours as long as you are in business. Thanks again for getting us in a house!”
“Chad and his group made the mortgage approval process smooth and understandable. Multiple updates and explanations during the process kept me informed of progress. Chad also provided great advice on other home services, in particular an insurance company that saved me thousands of dollars a year on home and auto insurance.”
Chad Baker and his team are amazing!
My husband and I found Chad through an article he had written. Every aspect of working with Chad and his team was exceptional. From our initial phone call where he explained the many options we had, to advice he gave in dealing with somewhat challenging sellers, and closing our loan ahead of schedule, the loan process with Chad and his team went very smoothly. I especially appreciated the one-on one guidance from Juliann, who really made me feel like I was her only client. I look forward to working with Chad and his team again and would highly recommend them to anyone looking for a mortgage.