Loan Training by Peter 03282020

Loan Training by Peter 03282020


F: Hi Peter, what do you think?

P: Here is the thing, so the borrower has two businesses, like you said, They have restaurant and they also have construction business.

F: I didn’t know that.

P: But you know what, they didn’t have too much income under, but little or none. Basic on business return, 2018 year fell a lot for the business income.Even though they have lots of rental properties . Having full in business income with the loss It’s not gonna work As i called to find out. So this is my suggestion, The program for self employed business as i mentioned to you is based on the bank statements. So i know for sure , well not lately because I am sure all the restaurant are closed pretty much , some sill maybe open but obviously the deposit will much less. So their program will the do not fix the tax return. All they want is 12-24 month bank statement and cant order deposit as income

 

F: I think she has 11 rental properties, right?

P: I saw that, I did, But you know what, the rental income you know in Akhorm obviously not that high, right? Here is guess $40k-$50K a year, but on there only like $10,000 a year . so i don’t think we will get much income to quality . $10,000 a year for a property, not that much.

 

F: Ohh, My god, so that’s less than..

P:You minus the expense, the net is very little. RIght? So we don’t have much income we can use for her rental properties either. Plus you know how worse is the market. They see negative income, they will not approved for sure. Okay? So the only suggestion i have iis the bank statement right now and i can tell you , with the market way is, that bank statement program is called NQM loan(non qualified mortgage). A qualified mortgage is based on your convention loan and non qualified mortgage is an alternative program, for example, the bank statement program as i mentioned to y ou. They have suspended all those loans because of this prices, however, there are a couple of lenders that conducted a meeting with management early of next week, basically they will not offer it. For example, formally need $10-15% for this program, but now you have to put 25%, 30% -35% just backed to foreclose days. They increased down payment size. So that’s what’s happening now with the market. So i think the best shot is to do the bank statement program right now. I am pretty sure some bank will offer it. But i said it 100 required bigger down payment.

 

F: When you say the bigger down payment, are you talk about 40% down?

P: I think 30% down. I think 30-40% down. If they can do 40% i think that’s pretty good chance that they can qualify. Their program will be okay with 40% down pay.

 

F: 40% , how much they can qualify?

P: It’s all depend. As i  said  it’s whatever they deposit in bank statement. For example, Let’s say each month they deposit roughly $10,000 a month. Even if they have $9999 in withdraw. They don’t care with the withdraws. They just use $10000 income. You know restaurant. They deposit quite big. I know that restaurant has quite deposit. I am for sure. So i don’t think that’s no problem if t hey have restaurant with the deposit.

 

F: So what would you suggest the next step?

P: The next step i suggest is to fill up the loan applications and provide 24 month bank statement. I think that i can send a checklist under what’s needed. Have them prepared that. So the most important is their loan application with their social street  and their bank statement everything.

 

F: The good part is that their fiscal score.

P: Yeah, that’s perfect. The only thing is their income. We just collect their bank statement and once Monday around, the lender will let me know, what’s the new update on their program.

 

F: As their down payment. $40% down, can she use loan equality line?

P: Yes, she can use the equality line.

 

F: Okay. The best scenario is how much for the interest rate?

P: Here is another thing, because they don’t have any update. We don’t know how much for the interest rate will be . BUt I am pretty sure it will be little bit higher because it’s risky right now. BUt I can tell you before 40% down. Let me ask you Frank, so she lives in Akhome, obviously. She can buy the home here for her daughter. So this home probably be her 2nd home. We can say 2nd home.

 

F:The interest rate will be much lower.

P: Yes, it will be lower. So i can tell you that prior to any change, if she can put down 40% down for 2nd home. That she probably get 4.5-4.75%. It’s pretty good rate. For they not verify income.

 

F: 4.5% not verify their income.

P: yes,exactly. But you know I don’t quote that . Ii can tell before who knows the terms will be. I can tell you all the other bank direct with , they all shut down. They suspended everything, you know, this is how bad…

 

F: You have been thru 2008-2009 real estate market right? How do you compare the present situation vise with 2008-2009?

P: so back to 2008-2009, people were foreclosing. People were defaulted for their loan. When the banks saw all that activates, what they did is, they started fully back on their program. Before you remember 100% financing . You have the operation arm Nege M loan, Number one, they should they suspended  because the principle goes higher, your value will goes down. They said forget it, This is not going to work. They canceled all program all together. Now the other program they even had 100 financing they need income, Frank, They need anybody with social to qualify the loan.100% financing . So basically on that program there, what they did is 100% financing , now you need put 20% down. You need to ask again and again, or just let them go. So that’s what they happen then. Now what’s happening is that all the businesses shut down. On this particular program. The bank statement program, usually use bank statement to show deposits. How I can show any income when the business shut down. So the lender cant verify your income anyway. Now your business shut down, how they can determine if he can qualify to make the payment. If they continue with this program. They fund your loan and your business is still shut down. You cant make mortgage payment. Right? You cant make the mortgage payment.so okay, we have to suspend…….