Daily Mortgage Rates LIVE - 10/23/2024 - Bank Statement Loans

In this episode of Daily Mortgage Rates Live, we take a deep dive into Bank Statement Loans, a flexible mortgage option designed for self-employed individuals, freelancers, and those with non-traditional income streams. If you’ve ever struggled with qualifying for a mortgage because your tax returns don’t reflect your true income, this episode is for you!

We’ll walk through how Bank Statement Loans work, explaining how lenders use personal or business bank statements instead of traditional income verification methods like W-2s or tax returns. You’ll learn who qualifies for these loans, what types of income and business documentation are required, and how lenders assess risk for borrowers who may have fluctuating earnings.

Whether you’re a business owner looking for an alternative way to secure financing or a lender eager to tap into the growing market of self-employed borrowers, this episode offers valuable insights on how Bank Statement Loans can unlock new possibilities for homeownership.

Tune in to explore how this loan option is reshaping the mortgage landscape and helping more people achieve their dreams of owning a home, even without the traditional income documentation!

For more episodes visit: https://themortgagecalculator.com/Page/Daily-Mortgage-Rates-LIVE-Video-Podcast

About The Mortgage Calculator:

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 over 5,000 Non-QM mortgage loan programs 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

Catch all the episodes of Daily Mortgage Rates LIVE at https://themortgagecalculator.com/Page/Daily-Mortgage-Rates-LIVE-Video-Podcast

Check out all episodes of Daily Mortgage Rates LIVE at https://themortgagecalculator.com/Page/Daily-Mortgage-Rates-LIVE-Video-Podcast

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 Bank Statement Mortgages...

Episode Transcript

Restream recording Oct 23, (00:00):
All right.

(00:02):
So, welcome everyone.
My name is Kyle Hiersche.
I'm the CSO Jose Gonzalez.
We are a lender that specializesin non QM loans and what we do
every morning on the show at 11a.
m.
Eastern is go through our actualmortgages.
mortgage rates.
And then we do a deep dive intoa different loan type.
And today's loan type, we'revery familiar with because we

(00:24):
specialize in non QM loans.
And this is probably the mostpopular non QM loan out there,
which is bank statement loan.
So I was able to take us throughsome examples of those here
shortly, but first let's seewhat the other rates are looking
like.
So Nick, if you are ready, let'sgo ahead and pull up today's
rates.
All right.

(00:45):
So we will check out today'srates.
It is October 23rd, just after11 a.
m.
Eastern.
So all of our standard rateprograms have their initial rate
sheets for today.
We'll set up a scenario tocompare across the program to
compare the APR.
If you'd like a full breakdownand itemized loan estimate that
itemizes all the fees that gointo the APR, please get with
our team members.
They'd be happy to send over theloan estimate.

(01:07):
For the demo today, as we doevery day, we'll set up a basic
scenario, a single unit, singlefamily home, 500, 000 purchase
price.
400, 000 loan amount thatcorresponds to 80 percent loan,
20 percent down payment.
And we use an estimated 760 FICOcredit score and an estimated 40
percent debt to income ratiowith those settings.

(01:31):
Let's check out today's rates.
So first up here is our 30 yearfixed conventional for primary
home.
That's the most common optionpeople think of when they think
of a mortgage rates today comingin at 6.
375 rate.
Finally, PR 6.
697.
And if for any reason ourcustomer doesn't qualify for a

(01:54):
conventional option, wetypically want to compare an FHA
option.
FHA allows more leniency oncredit issues and a much higher
overall debt to income ratio,but does require upfront and
yearly mortgage insurance.
Rate for FHA coming in today, 5.
5 rate.
Finally, PR with all the feesand mortgage insurance, 6.
477.
So if our customer qualifies forboth, they may consider FHA if

(02:16):
they're willing to do themortgage insurance.
And our customers that need FHA,definitely a good option, very
comparable.
And our VA options only foreligible active service members
and veterans.
If you are eligible, theseprograms are definitely the
best.
You see here rates as low as 5.
625.
Finally, PR with a standardfunding fee 5.
939.
So definitely lower than an FHAor conventional example for this

(02:38):
scenario.
So our vets and service membersshould definitely take advantage
of those programs.
And our final program that everybanker lender has, USDA, but
that's only for properties inUSDA eligible areas of the
country.
That's the rural areas.
If the property is eligible andthe borrower is eligible, these
are great options to check out.

(02:59):
Rates as low as 5.
625.
Final IPR with all fees, 6.
383.
So it's a touch lower than FHA,which is typical.
So our customers that look Inthese rural areas, definitely
compared to FHA, typically goingto be a touch cheaper and a
touch cheaper than conventional.
So great option for those ruralproperties.
And that rounds out all thestandard options that any bank

(03:21):
or lender has.
But if our customer doesn'tqualify, many banks or lenders
will deny them.
That's where we love to help outwith our 5, 000 additional
options, starting with our 30year fixed.
Non QM Alt Doc options for ourprimary home.
So if our customer doesn'tqualify for any of our other
primary programs likeconventional or FHA using tax
returns and standard docs, wecan switch to using alternative

(03:44):
docs such as our topic fortoday, uh, bank statement loans.
We can also use, uh, P& Lstatements, 1099s, asset
related, all kinds of differentoptions.
But our bank statement optionstoday coming in at 6.
375, final APR 6.
707, which is actually almostidentical to conventional.
So absolutely amazing.

(04:05):
Non QM is coming in at almostidentical price to conventional
today.
And we have tons of otheroptions for investment
properties here, starting withour non QM alt block options.
So again, bank statement orsimilar.
Coming in today rates as low as7 percent final APR 7.
350 and we'll compare that toour other investment options.

(04:28):
Remember there are no governmentoptions for investment
properties so no USDA FHA or VAprograms but we do have
conventional.
Conventional comes in today 6.
875 rate final APR 7.
211 and that's still a touchlower than our alt doc but not
better than our favorite optionsour DSCR loan options.
DSCR stands for debt to servicecoverage ratio, no income

(04:50):
information needed, noemployment information needed.
We simply use the estimatedrents from the appraisal to
determine a DSCR ratio.
The estimated rents can coverthe estimated expenses, aka the
property cash flows every month.
That's a ratio of one or higher,which is preferred.
And this option shows our threeyear prepayment penalty option,
which is the most common.
Rates as low as 6.

(05:10):
499 today, final APR 6.
835, which is better thanconventional, which is amazing.
Okay.
And we can add a five yearprepayment penalty to sweeten
the deal even more, rates as lowas 6.
375, final APR there, 6.
707.
And our final DSCR option, eventhough we have thousands of

(05:31):
combinations, the standardoption here with no prepayment
penalty, as some states don'tallow it, comes in today at 7
percent rate, final APR 7.
350, just a touch aboveconventional to do a no
prepayment penalty option.
So tons of options there andthousands of other variations as
well.
And our last two optionsdefinitely popular these days as

(05:53):
many of our customers have lowerrates than what we're just
looking at here on theirmortgage.
Don't want to necessarily changethat mortgage they have in place
but need to get some cash out oftheir property no problem.
You can use a HELOC which is thetraditional option or the
preferred option now is our 30year fixed second mortgage
options or primary home.
Rates come in today at 8% finalpr, 8.370 lower rates than a

(06:16):
heloc.
And fixed rates as compared to aHELOC is adjustable.
So definitely cool option toconsider.
And the same program for ourinvestment properties comes in
today, 9.375.
Rate to get cash out.
Final PR there, 9.761.
So those are our standardoptions.
We check out every day.

(06:37):
Let's go ahead and.
Switch into today's topic onbank statement loans.
So typically bank statement isthe most common non qm option So
that's the option we typicallysee in our library demo But jose
will break down all thedifferent variations We have as
there's thousands of differentcombinations once we get into
the bank statement option Sojose, what do we have for them

(06:57):
today?
Good morning, everybody Thankyou for joining us for daily
mortgage resale with themortgage calculator Bank
statement loans are thepreferred option, uh, preferred
non QM option for our selfemployed borrowers.
It is a great solution.
It is a solution where theborrower that's making 3, 000 a
month on tax returns is making30, 000 a month using bank

(07:19):
statements and definitelyqualifies for the home that they
are shopping for.
We saw a spike in bank statementloans as the interest rate
started inching up in thebeginning of 2022 and it now
makes up.
the largest segment of non QMorigination.
So let's get into these amazingbank statement options that we

(07:39):
have today.
Maximum LTV for any of our nonQM options is always 90 percent
never any mortgage insurance onany non QM products regardless
of the loan to value.
So this first option here wehave is for a primary purchase

(08:00):
with only 10 percent down.
Our lowest cost option is 8.
625 percent at par.
Then you can buy that down.
All the way to 7.75% at a costof 2.375 points.
Our next option is the maximumLTV option for an investment

(08:22):
purchase using bank statements.
This is amazing because we areat 85% loan to value only using
the last 12 months bankstatements to qualify the
borrower, 7.875 is our lowestcost option.
At a cost of 1.
375 points.
And we can buy that down all theway to 6.

(08:44):
999 at a cost of 3.
125 points.
And for our lower credit scoreborrowers, we do have bank
statement options all the waydown to a 600 credit score.
That is correct.
That is not a typo.
80 percent LTV is the maximumLTV for this option.

(09:07):
This is available for bothinvestment and primary
purchases.
I'm sharing with you today, theinvestment property option at 80
percent LTV for 600 credit scoreborrower, 10.
999.
Is our lowest cost option atpar.
And you can buy that down allthe way to 9.

(09:28):
499 at a cost of 3.
125 points.
And now for our cash outoptions, 80 percent LTV is our
maximum LTV for bank statementcash out refinance options.
Uh, this is our primary option.

(09:49):
For our primary residence cashout refi and our lowest cost
option is 7.
999 with a lender credit of aquarter point.
That's nice to see.
And we can buy that down all theway to 6.
875 at a cost of 2.
5 points for our primary cashout refi at 80%.

(10:12):
using bank statements.
And now our investment option.
Great news.
Investment cash out refi is alsomaximum 80 percent loan to
value, lowest cost option 7.
999 at a quarter point cost.
And you can buy that down allthe way to an amazingly low 6.

(10:33):
625%.
At a cost of three points forbank statement investment cash
out refi at 80 percent loan tovalue.
And our last option here is forour lower credit score
borrowers.
Again, 600 credit score is ourminimum credit score for this

(10:54):
option.
75 percent LTV is the maximumLTV.
For this credit tier and ourlowest cost option, 10.999 at
par, and you can buy that downall the way to 9.499 for our

(11:15):
cash out refi for an investmentproperty with a 600 credit score
at 75% LTV.
So great bank statement optionshere at the mortgage calculator.
And should your bank statementloan have any issues, remember.
The profit and loss loan is anamazing workaround and do not

(11:36):
forget 1099s for your realtorsand other borrowers that receive
1099s.
All right, I don't see anyquestions, but just to touch on
to, uh, Jose, so you can combinebank statements with other forms
of income as well?
Absolutely.
Um, I'm about to close one rightnow where we are combining W 2

(12:01):
income with bank statements.
No need for tax returns.
No need for tax transcriptseither.
We can actually combine multipleincome streams.
We can actually use bankstatements 1099s and P& L and W
2.
If your borrower has all thoseseparate company streams, and I
think I also recently, uh,closed one also that had three

(12:26):
income streams.
So that is very unique, uh,something that our, um, that our
borrowers may not be aware of.
And some MLOs out there may notbe aware of, but if you are on
the mortgage calculator team, wedefinitely keep you posted on
all these great options.

(12:46):
All right still don't see anyquestions.
So we'll go ahead and wrap it upRemember everybody we do this
show at 11 a.
m Eastern every weekday where wego through our live rates and
then do a deep dive into adifferent loan type Uh, thank
you everybody for tuning in.
We'll see you tomorrow 11 a.
m Eastern for the next episodeof daily rates live with the
mortgage calculator.
Have a great day everyone