Call the lending world crazy again (as if you thought otherwise to begin with), but it’s true that those who have significant assets can qualify for loans without a strong tax return. These programs basically take someone’s hard-earned money and convert the assets into income. For example, someone who has $2,000,000 but no job and no other source of income can be given credit for over $128,000 of income annually and potentially qualify to buy a $600,000+ home.
And with the current “feeding frenzy” in real estate currently happening, it’s been a huge help that there are also programs for move-up buyers that don’t penalize them on the cash out-flow associated with their current residence. For example, if someone’s “PITI” on a property is $5,000 monthly, but the property could rent for the same $5,000, a simple rental survey can completely wash out the liability and make the difference to help the client qualify for a mortgage on their new home until they can sell their existing home post close. There are also “cross collateral” loans available where the equity for the current residence and the equity for the new residence are combined to produce one loan. For example, a client has a free-and-clear $1,000,000 and wants to move into a $2,000,000 property. We can lend up to 70% of the combined value of these properties, or $2.1mm; as such, the client really only needs $100,000 to make the move.
No credit? No problem. It’s hard to believe that those without credit, whether domestic or foreign, can get a mortgage. In these cases, all that’s needed is sufficient, verifiable n and a 20% down payment… These programs are especially popular with those transferring to the US on a work visa.
And finally, there are programs that can stretch a buyer’s qualifications by 30% or more simply by using 40-year amortization and/or low-interest rates to qualify. As you may know, qualifying rates on ARM mortgages are generally higher that the actual Note rate, yet programs exist where only the Note rate is used for qualification.
For those of you who knew Jim Byrnes, you’re likely a better person from knowing him, and I look forward to raising a glass of grape juice in his honor this afternoon…