Daily Mortgage Rates LIVE - 10/10/2024 - 2nd Mortgage HELOANS

In this episode of "Daily Mortgage Rates LIVE," we explore an exciting opportunity for homeowners looking to make the most of their home equity—2nd Mortgage HELOANS (Home Equity Loans). If you've been wondering how to leverage the value in your home for big projects, debt consolidation, or other financial needs, this episode is a must-listen!

2nd Mortgage HELOANS allow you to tap into your home's equity through a fixed-rate, second mortgage loan, providing a lump sum of cash for whatever purpose you need. Whether you’re planning a home renovation, paying off high-interest debts, or funding a major life expense, a HELOAN can be a powerful financial tool.

🏠 What exactly is a 2nd Mortgage HELOAN, and how does it work?
💡 Who should consider taking out a HELOAN, and what are the key benefits?
📈 What’s the difference between a HELOAN and a HELOC (Home Equity Line of Credit)?
⚠️ What are the potential risks to be aware of before applying?

Our expert hosts will guide you through the ins and outs of 2nd Mortgage HELOANS, covering eligibility requirements, the application process, and how to determine if this is the right financing option for you. We’ll also discuss how a HELOAN differs from other home equity solutions and the pros and cons that can impact your financial strategy.

If you're ready to make your home equity work for you, this episode will provide the information and expert insights you need to navigate the world of 2nd Mortgage HELOANS with confidence. Tune in to "Daily Mortgage Rates LIVE" for valuable tips on making informed decisions and maximizing your financial opportunities. Don’t miss out—subscribe now and take your next step towards financial freedom!

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The Mortgage Calculator is a licensed Mortgage Lender (NMLS #2377459) that specializes in using technology to enable borrowers to access Conventional, FHA, VA, and USDA Programs, as well as thousands of Non-QM mortgage loan program variations using alternative income documentation!

Using The Mortgage Calculator proprietary technology, borrowers can instantly price and quote thousands of mortgage loan programs in just a few clicks. The Mortgage Calculator technology also enables borrowers to instantly complete a full loan application and upload documents to our AI powered software to get qualified in just minutes!

Our team of licensed Mortgage Loan Originators can assist our customers with Conventional, FHA, VA and USDA mortgages as well as access thousands of mortgage programs using Alternative Income Documentation such as
president, Nick Hiersche and ourCSO, Jose Gonzalez.
We are a lender that specializesin non QM loans.
And what we do every weekday at11 a.
m.
Eastern on the show is gothrough our actual live mortgage
rates for a few programs.
Then we do a deep dive into adifferent loan type.
And today's loan type is goingto be second mortgages or HMOs.

(00:21):
So I'll go ahead and pass itover to Nick to go through the
rates and then Jose will talkabout some second mortgage
programs.
So Nick, if you're ready, let'sgo ahead and check out today's
rates.
Alrighty, we'll pull up today'srates for October 10th, just
after 11 a.
m.
Eastern.
So all the initial rate sheetshere are live.

(00:43):
We'll set up a standard scenarioto compare the APR across the
program.
If you'd like a breakdown of allthe fees, the itemized loan
estimate, Please get with one ofour team members.
They'd be happy to help you out.
For our demo, we always set up astandard scenario.
Single family home, 500, 000purchase, 400, 000 loan amount.
That corresponds to 80 percentloan to value, 20 percent down

(01:04):
payment.
Use an estimated 760 FICO creditscore and an estimated 40
percent debt to income ratio.
So let's make the rates nice andbig here.
And first up is, oops, click thewrong button.

(01:26):
Sorry.
First up is our 30 year fixconventional for a primary home.
Rates today come in at 6.
124, final APR 6.
439.
And if for any reason ourcustomer doesn't qualify for a
conventional option, wetypically want to compare an FHA
option.
FHA allows more leniency oncredit issues and a higher
overall debt to income ratio,but does require upfront yearly

(01:49):
mortgage insurance.
FHA comes in today 5.
25, rate, final APR with all thefees and mortgage insurance 6.
205.
And if our customer qualifiesfor both, they may consider FHA,
could be a touch cheaper.
They're willing to do themortgage insurance and our
customers that need to use it.
Definitely very comparableoption.
VA is only for eligible vets andactive service members.

(02:12):
For those that are eligible,these programs are amazing.
5.
5 rate today.
Finally, if you have thestandard funding fee, 5.
798.
And if we compare that to FHAand conventional, VA is
definitely going to be the bestoption for eligible borrowers.
And the final standard optionhere, USDA, those are for
properties in USDA eligibleareas.

(02:34):
Those are the rural areas of thecountry.
If our property is eligible andour borrower is eligible, these
are great options to consider.
Rates come in today, 5.
375.
All the fees included, APR comesin at 6.
125, which beats FHA by just atouch of our customers comparing
and beats conventional by just atouch for our customer that
might be comparing.
So good option for those ruralareas.

(02:56):
And.
That rounds out our standardoptions.
Next comes our non QM AltDocoptions.
So many other banks or lendersdo not have these options that
we have and would have to denythe customer.
Fortunately, we havealternatives where the customer
doesn't qualify with tax returnsand standard documents needed
for a conventional FHA, etc.

(03:17):
They can switch to usingalternative documentation like
bank statements, 1099s, emailstatements, all kinds of
different options.
We have over 5, 000 variations.
6.
125 finally car 6.
450 almost identical toconventional today, which is
pretty amazing.

(03:37):
And the investment propertyoption for non QM again, bank
statement or similar.
Comes in today, 6.999 final a PR7.415, and we'll compare those
with our other investmentproperty options.
So first off, our conventionalhere, there are no government
options, so no U-S-D-A-F-H-A orva, but conventional comes in

(04:02):
today, 6.875.
Rate final, a PR 7.211.
Beating alt dock by a touch.
But not beating our DSCR.
Our favorite option.
DSCR stands for debt servicecoverage ratio.
We don't need any incomeinformation or employment
information from our borrowers.
So great options for ourinvestors simply use the
estimated rents to compare tothe estimated expenses.

(04:25):
If the estimated rents cover theestimated expenses they pay, the
property cash flows, that's aratio of one or higher.
And this option here is our mostcommon option with a three year
prepayment penalty.
Comes in today, 6.3758.
Finally, PR 6.682, beatingconventional by quite a bit.
And we can sweeten it up alittle bit with a 30, uh, sorry,
a five year prepayment penalty.

(04:47):
Rates today come in at 6.
25, final APR 6.
553, and the final DSCR optionis a no prepayment penalty
option to check out.
Rates come in today at 7, finalAPR is 7.
311, so just a touch higher thanconventional.
I'd still say a hundred percentof investors would prefer this
to conventional if they do notwant a prepayment penalty as

(05:09):
DSCR loans are preferred bymost.
And our final two things we goover today are actually our
topic for today are 30 yearfixed second mortgages.
So these are for our customersthat may have lower rates than
what you see here for all theother programs for their first
mortgage.
Still want to access theirequity in their home, still want

(05:30):
to get some cash out, but don'twant to touch that first
mortgage.
And these are alternatives toHELOCs, which would typically be
the most common option.
So instead of a HELOC, we canget a 30 year fixed.
It's not adjustable, it's fixed.
and much lower rates than aHELOC.
For our primary home, we can getrates as low as eight percent,
final APR 8.
370.
And for our investors, we canget rates as low as 9.

(05:54):
375, final APR 7, or 9.
731.
And HELOCs are very rare forinvestors.
This is a great option.
But let's have Jose break thisdown a little bit further, as
these general price quotes oftendon't do a special program like
this.
Justice.
Where we can go through all thespecific examples.

(06:14):
So.
Jose, let's check out somesecond mortgage options.
Good morning everybody.
Thank you for joining us forDaily Mortgage Rates Live with
The Mortgage Calculator.
He loans are fixed rate, closedend second mortgages.
As opposed to a HELOC, uh, whichis an open ended second

(06:37):
mortgage, could be variable rateor could be fixed rate.
We do have fixed rate HELOCs.
The difference is that the HELOCis open end, so you pay interest
on what you owe.
Versus the he loan, which is aclosing mortgage.
And it has a fixed amortizationand a fixed amortization table
as well.

(06:59):
Now, the other really bigadvantage of the he loans versus
the he locks is the multipleincome streams that we can use.
Uh, we can use a traditionalfull doc.
Uh, we can also use alt doc likebank statements.
Profit and loss reports and1099s.

(07:20):
And we can also use the R whichis pretty amazing as well.
So let's get into our optionstoday on our fixed rate.
He loans.
Uh, first option here we have isthat the maximum LTV or maximum
C LTV, excuse me, of 90 percentcombined loan to value.

(07:45):
We're talking second mortgagesis the LTV when you combine the
loan amount for the first andthe loan amount for the second
divide that by value and thereyou have your combined loan to
value.
So in our full doc option here.
Uh, for our refi 10.

(08:05):
375 is our lowest cost option atpar, and you can buy that down
to 9.
625, and this is for a straightout, uh, finance.
Now we do have a piggyback loantransactions that are possible.
So I do have one example here,but a piggyback transaction,

(08:26):
which is basically a combo loan,when you're purchasing a
property, you have a first loanfor X amount, a second mortgage
for.
Y amount and, uh, usually, uh,different reasons why you may do
that.
Uh, mortgage insurance, uh,combo loan on a condo in

(08:49):
Florida, right?
Where you're trying to getmaximum CLTV of 90%.
So here, uh, 10.
375 is our lowest cost option atpar.
And you can buy that down to 9.
625 at a cost of 2.
125 points.
For our combo.
Now back to the cash out refioptions.

(09:10):
Now this is for a primary, uh,cash out refi, 85 percent CLTV,
because this is a bank statementoption.
So, uh, 85%, uh, CLTV is the maxCLTV on that.
You're looking at 10.
375 is our lowest cost option atpar, and you can buy that down

(09:32):
to 9.
625 at a cost of 2.
125 points.
And now for our DSCR option,maximum 70 percent LTV for this
option.
Uh, the DSCR option does allowadding a prepayment penalty to
it.

(09:53):
Uh, 11.
875 lowest cost option and 11.
75 lowest rate option at themaximum.
70 percent of CLTV.
You'll probably get a few moreoptions if you drop the CLTV a
little bit, but this is ourmaximum CLTV.
And now a cash out option usingprofit and loss for an

(10:18):
investment property.
We are able to go to 75 percentCLT for this.
11.
5 percent is our lowest costoption.
And you can buy that down allthe way to 10.
625.
And our last option here isusing 10.

(10:39):
99.
So we have run the wholecontinuum here from full doc,
DSCR, P& L, bank statement, andnow 10.
99.
This one for an investmentproperty, 75 percent CLTV max on
this one as well.
9.
75 lowest cost option, actuallywith a little bit of a lambda

(11:00):
credit.
And you can buy that one downall the way to 9.
375 at a cost of one point foryour 1099 he loan investment
cash out refund.
So definitely look to themortgage calculator for all of
your second mortgage, he loanand he lock options.

(11:27):
All right.
Thank you.
I don't see any questions here.
So I think we'll go ahead andwrap it up Remember that we do
this show at 11 a.
m Eastern every weekday where wego through our live rates and
then do a deep dive into a newtopic So we'll see you all
tomorrow with a new topic totalk about at 11 a.
m Eastern for the next episodeof dv rates live with the
mortgage calculator everyone.
Take