Primary residence - cash out refi
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  1. #1
    Senior Member Reputation points: 111969 Olderguy's Avatar
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    Primary residence - cash out refi

    Broker reached out to me with his client having his primary residence free and clear.

    Has strong bank statements - good deposits personal and business.

    Pre approval:

    $1,1000,000 loan amount

    Value determines by AVM (automated valuation model) - desktop appraisal.

    95% Loan to Value

    30 year fixed Heloan

    Non QM no mortgage insurance

    7.374% rate

    Principal and Interest payment: $7,596.00 a month

    6 months bank statements for pre approval.
    12 month bank statements for submitting

    $1,000 up front fee - refundable if unsuccessful.

    5% consulting fee when funded

    I get 2.5% which I split with referring broker

    PS: Fico at closing determines the program - so it may change.
    Last edited by Olderguy; 01-16-2025 at 01:02 AM.
    Steve Benjamin
    Professional Business Loans

    522 Contessa
    Irvine, CA 92620
    steveprobiz@gmail.com
    https://probizloans.net/
    Broker, Underwriter, general business loan expert
    949.228.1050


    @ 24 hour funding working capital loans
    @ Term loans from 3 years to 10 years at 9.5% and up
    @ Equipment financing up to 7 years
    @ Property loans - Hard Money and traditional - Primary, Investment, commercial, land, fix and flip, construction.
    @ SBA loans - 7A and 504.
    @ Private money equity and debt for major investments
    @ Personal Loans up to gross income from personal tax return.

  2. #2
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    5% broker fee for a loan on a personal residence? Is this a business loan using the residence as collateral? Otherwise, why would you be able to touch a personal residence without a license? Why can't he go to his local and get 80% LTV without the 5% broker fee? If the collateral is 1.1mm on a desk appraisal, it's probably higher on a full appraisal, because who's offering a 95% LTV? Why would anyone pay 5% on a residential mortgage?

  3. #3
    Senior Member Reputation points: 111969 Olderguy's Avatar
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    Quote Originally Posted by abfunders View Post
    5% broker fee for a loan on a personal residence? Is this a business loan using the residence as collateral? Otherwise, why would you be able to touch a personal residence without a license? Why can't he go to his local and get 80% LTV without the 5% broker fee? If the collateral is 1.1mm on a desk appraisal, it's probably higher on a full appraisal, because who's offering a 95% LTV? Why would anyone pay 5% on a residential mortgage?
    National bank. No license needed. It's a bank statement or P & L justification that is not what a local bank can process. It's a Non QM deal. It's for people who can't get bank loans and it's more money for brokers. Brokers can now offer loans for ALL of their clients properties - investment and owner occupied and primary residences.
    Last edited by Olderguy; 01-16-2025 at 10:24 AM.
    Steve Benjamin
    Professional Business Loans

    522 Contessa
    Irvine, CA 92620
    steveprobiz@gmail.com
    https://probizloans.net/
    Broker, Underwriter, general business loan expert
    949.228.1050


    @ 24 hour funding working capital loans
    @ Term loans from 3 years to 10 years at 9.5% and up
    @ Equipment financing up to 7 years
    @ Property loans - Hard Money and traditional - Primary, Investment, commercial, land, fix and flip, construction.
    @ SBA loans - 7A and 504.
    @ Private money equity and debt for major investments
    @ Personal Loans up to gross income from personal tax return.

  4. #4

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  6. #6
    Senior Member Reputation points: 111969 Olderguy's Avatar
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    Micah - why are you such a negative nellie?

    It's not Fannie or Freddie - it's non QM
    Steve Benjamin
    Professional Business Loans

    522 Contessa
    Irvine, CA 92620
    steveprobiz@gmail.com
    https://probizloans.net/
    Broker, Underwriter, general business loan expert
    949.228.1050


    @ 24 hour funding working capital loans
    @ Term loans from 3 years to 10 years at 9.5% and up
    @ Equipment financing up to 7 years
    @ Property loans - Hard Money and traditional - Primary, Investment, commercial, land, fix and flip, construction.
    @ SBA loans - 7A and 504.
    @ Private money equity and debt for major investments
    @ Personal Loans up to gross income from personal tax return.

  7. #7
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    Just posting some extra resources to read up, no negativity on this last posts.

  8. #8
    Senior Member Reputation points: 111969 Olderguy's Avatar
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    Non-QM loans — to serve borrowers who don’t meet traditional lending requirements. Non-QM loans have their own distinct set of criteria, including flexible income and credit requirements. In exchange, borrowers may need to make a larger down payment and pay a higher interest rate.

    Non-QM loans: flexibility at a cost

    Non-QM loans are aimed at borrowers with financial profiles that don’t meet the requirements of a typical qualified mortgage. This often involves an inconsistent or nontraditional income structure, a major credit event or high debt. Features associated with non-QM loans include:

    Alternative income documentation. Depending on the lender’s requirements, borrowers may demonstrate their ability to repay the loan using tax returns, bank statements, asset qualifiers or 1099s.

    No waiting period after bankruptcy. Some lenders offer non-QM loans that cater to borrowers with a history of bankruptcy or foreclosure, allowing them to get a mortgage as soon as one day after the event. Comparatively, qualified mortgages may require a waiting period of one to four years after bankruptcy, and two to seven years after a foreclosure.

    Higher debt limits. Qualified mortgages have a maximum debt-to-income ratio (the percentage of your income that goes toward monthly debt payments) of 43%, while some non-QM loans allow for ratios over 50%.

    Higher down payment requirements. Non-QM loan borrowers may be required to put a minimum down payment of 15% to 20%. Meanwhile, the typical down payment was 8% for first-time home buyers and 19% for repeat buyers in 2023, according to the National Association of Realtors.

    Higher interest rates. Non-QM loans typically have higher interest rates than qualified mortgages. So while it may be easier to meet their requirements than a qualified mortgage, non-QM loans are also a more expensive way to borrow.

    No government backing. Because non-QM loans don’t have to follow CFPB standards, they can’t be purchased by Fannie Mae or Freddie Mac, nor can they be backed by the Department of Veterans Affairs, U.S. Department of Agriculture, or the Federal Housing Administration. So instead, the lender is taking on all the risk of issuing the loan.

    Repayment terms may be interest-only

    The Consumer Financial Protection Bureau defined the standards for qualified mortgages in response to the wave of delinquencies and foreclosures that came with the 2008 economic crisis. At that time, loans were being issued to borrowers who couldn’t afford to pay them. Many of these loans had features the CFPB deemed “toxic,” including interest-only payments. This is not unusual with non-QM loans and can make borrowers more prone to delinquency.

    Some borrowers may be attracted to interest-only payments because they are less expensive, but larger payments will eventually come due. And a borrower may not be building equity when making interest-only payments because the loan’s principal balance doesn’t change.

    If you’re considering a non-QM loan, you’ll want to review the repayment terms offered carefully. The good news is that riskier factors like balloon payments (which require a substantial lump-sum payment at the end of the term) and negative amortization (where the minimum required payment doesn’t cover the interest, so the loan balance is growing with time instead of shrinking) are much less common today than they were before 2008. Still, you’ll want to enter any loan agreement confident that you fully understand what is expected and can make all required payments.

    » MORE: Mortgage payment calculator

    Borrowers who may consider a non-QM loan

    The requirements associated with qualified mortgages are designed to increase the likelihood that the borrower can stay current on their payments. A non-QM loan may be a good fit for you if you are confident that you can take on the required down payment and monthly amount due and if any of the following apply to you:

    You’re a contractor, self-employed, retired or otherwise unable to meet the income documentation requirements for a qualified mortgage.

    You’ve recently experienced a major credit event, such as foreclosure or bankruptcy.

    You’re a landlord and you want to use the cash flow from your other properties to qualify for a home.

    More than 43% of your income goes toward paying your monthly debts.
    Steve Benjamin
    Professional Business Loans

    522 Contessa
    Irvine, CA 92620
    steveprobiz@gmail.com
    https://probizloans.net/
    Broker, Underwriter, general business loan expert
    949.228.1050


    @ 24 hour funding working capital loans
    @ Term loans from 3 years to 10 years at 9.5% and up
    @ Equipment financing up to 7 years
    @ Property loans - Hard Money and traditional - Primary, Investment, commercial, land, fix and flip, construction.
    @ SBA loans - 7A and 504.
    @ Private money equity and debt for major investments
    @ Personal Loans up to gross income from personal tax return.

  9. #9
    No negativity just a word of caution - mortgages on primary residences, non-qm or not require the originator to be licensed.

    On that note, if you have any clients who want/need to use proceeds from a cash out or HELOC on their primary residence in Florida or Texas let me know.

  10. #10
    Senior Member Reputation points: 111969 Olderguy's Avatar
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    Quote Originally Posted by thorn89 View Post
    No negativity just a word of caution - mortgages on primary residences, non-qm or not require the originator to be licensed.
    National banks are exempt from state licensing requirements for real estate loans, including mortgages on primary residences.
    Steve Benjamin
    Professional Business Loans

    522 Contessa
    Irvine, CA 92620
    steveprobiz@gmail.com
    https://probizloans.net/
    Broker, Underwriter, general business loan expert
    949.228.1050


    @ 24 hour funding working capital loans
    @ Term loans from 3 years to 10 years at 9.5% and up
    @ Equipment financing up to 7 years
    @ Property loans - Hard Money and traditional - Primary, Investment, commercial, land, fix and flip, construction.
    @ SBA loans - 7A and 504.
    @ Private money equity and debt for major investments
    @ Personal Loans up to gross income from personal tax return.

  11. #11
    Quote Originally Posted by Olderguy View Post
    National banks are exempt from state licensing requirements for real estate loans, including mortgages on primary residences.
    Be mindful of RESPA...

  12. #12
    Senior Member Reputation points: 111969 Olderguy's Avatar
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    Quote Originally Posted by thorn89 View Post
    Be mindful of RESPA...
    Paid as a consulting agreement...separate.
    Last edited by Olderguy; 01-16-2025 at 11:37 PM.
    Steve Benjamin
    Professional Business Loans

    522 Contessa
    Irvine, CA 92620
    steveprobiz@gmail.com
    https://probizloans.net/
    Broker, Underwriter, general business loan expert
    949.228.1050


    @ 24 hour funding working capital loans
    @ Term loans from 3 years to 10 years at 9.5% and up
    @ Equipment financing up to 7 years
    @ Property loans - Hard Money and traditional - Primary, Investment, commercial, land, fix and flip, construction.
    @ SBA loans - 7A and 504.
    @ Private money equity and debt for major investments
    @ Personal Loans up to gross income from personal tax return.

  13. #13
    Senior Member Reputation points: 111969 Olderguy's Avatar
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    Term sheet offer we just got:

    Loan Terms Summary:
    Primary residence, cash out:

    Qualified using bank statements:

    Loan Type: 30-Year Fixed
    Cash Out: $1,035,000
    Interest Rate: 7.75%
    Monthly Payment: $7,414
    Steve Benjamin
    Professional Business Loans

    522 Contessa
    Irvine, CA 92620
    steveprobiz@gmail.com
    https://probizloans.net/
    Broker, Underwriter, general business loan expert
    949.228.1050


    @ 24 hour funding working capital loans
    @ Term loans from 3 years to 10 years at 9.5% and up
    @ Equipment financing up to 7 years
    @ Property loans - Hard Money and traditional - Primary, Investment, commercial, land, fix and flip, construction.
    @ SBA loans - 7A and 504.
    @ Private money equity and debt for major investments
    @ Personal Loans up to gross income from personal tax return.

  14. #14
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    I've never heard of a 95% CLTV non-QM anywhere and I do a lot of these with lots of lenders.
    If you can do a second with the first that would be great. The first lender would have to agree to subordinate.
    - not lic'd in CA and lending on a primary is a risk.
    Last edited by fundnclose; 02-01-2025 at 11:32 AM.

  15. #15
    Senior Member Reputation points: 111969 Olderguy's Avatar
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    Quote Originally Posted by fundnclose View Post
    I've never heard of a 95% CLTV non-QM anywhere and I do a lot of these with lots of lenders.
    If you can do a second with the first that would be great. The first lender would have to agree to subordinate.
    - not lic'd in CA and lending on a primary is a risk.
    The first lender doesn't need to subordinate anything....the second goes after it....there is no risk with a national bank...no license required. A national bank can do loans in any state.
    Last edited by Olderguy; 02-07-2025 at 07:49 PM.
    Steve Benjamin
    Professional Business Loans

    522 Contessa
    Irvine, CA 92620
    steveprobiz@gmail.com
    https://probizloans.net/
    Broker, Underwriter, general business loan expert
    949.228.1050


    @ 24 hour funding working capital loans
    @ Term loans from 3 years to 10 years at 9.5% and up
    @ Equipment financing up to 7 years
    @ Property loans - Hard Money and traditional - Primary, Investment, commercial, land, fix and flip, construction.
    @ SBA loans - 7A and 504.
    @ Private money equity and debt for major investments
    @ Personal Loans up to gross income from personal tax return.

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