Types of Mortgages
There are different types of mortgages for home buyers of residential primary owner-occupant. There are also dozens of different types of mortgages for buyers of second homes. Gustan Cho Associates is a mortgage broker licensed in 48 states (not licensed in NY, MA) including DC, Puerto Rico, and the U.S. Virgin Islands. We also have a network of over 190 wholesale mortgage lending partners with access to thousands of types of mortgages. So what does it mean by different types of mortgages for borrowers? Not all mortgage lenders have the same types of mortgages available for their clients.
What Types of Mortgage Options Is Available in the Marketplace
There are thousands of types of mortgages in the marketplace. Whatever types of mortgages are in the marketplace, you can rest assured Gustan Cho Associates has it available. Gustan Cho Associates is always trying to expand the mortgage programs we offer to our clients. The main focus of our team was expanding the States we are licensed to do business.
Best Mortgage Lenders For Bad Credit With 190 Wholesale Partners
Since we succeeded and have coverage in 48 States, we are now focused on expanding the programs we offer our clients. The mortgage markets have been dramatically changing during the year 2022. Mortgage programs are also rapidly changing. In this blog, we will detail a few new programs we offer our clients. You will also detail how to apply for one of these special programs with our team of loan officers.
Types of Mortgages Requiring Limited Documentation
The rise of “limited documentation” mortgage lending. In the crazy market we find ourselves in, many banks are rolling out specialty loan programs. As the pandemic has significantly impacted many self-employed individuals, numerous loan programs are available to help self-employed borrowers qualify for a mortgage loan.
No Income Tax Return Mortgages
We have numerous outlets that allow a “no documentation” loan or “limited documentation” loan. While it is true, that these programs will have a higher interest rate associated with them, they can be your key to home ownership. The mortgage interest is tax deductible, and you can continue to file your tax returns as you do today.
What Are No Documentation Mortgage Loans
What is a no-documentation loan? While the term is slightly misleading, a no-documentation loan means it is a mortgage program that requires very little information from a borrower in order to qualify. In order to verify income, typically you will need a CPA letter that states how much money you make per year.
What Documents Are Required on No-Doc Mortgages?
The loan program will also require identification verification with the use of a government-issued photo ID. Some programs will also require verification of your Social Security number. Not much else is needed to close these mortgage loans. These programs benefit many self-employed individuals across the nation. We are experts in these programs and have a few different outlets that offer these programs. Please reach out to us for specifics.
What Is a Low Documentation Mortgage Loan?
What is a low-documentation mortgage loan? This is very similar to a no-documentation loan but will have slightly better terms because more information is provided to the underwriter surrounding your sources of income. A low documentation loan can use several different sources of verification of income to qualify.
Bank Statement Deposit Mortgage Loans
The most popular form of income verification would be a bank statement loan. A bank statement loan will qualify self-employed borrowers based on business-related deposits shown on their bank statements compared to utilizing federal income taxes to qualify for a mortgage. For more information on bank statement lending, please call Gustan Cho at (800) 900-8569 or via email gcho@gustancho.com.
One-Year Tax Return Mortgages
Other low-documentation mortgage loans include one-year tax returns. This mortgage program will qualify you based on your most recent year of federal income taxes (not the typical two-year average used in the mortgage industry). This program can significantly increase your qualifying income for mortgage purposes.
Let’s say you had a record year for income, you may now utilize just a one-year average of your federal income tax returns to qualify for a mortgage. 1099 income verification. If you are a 1099 employee, you know the advantages and disadvantages of this pay structure.
Can I Get a Mortgage With 1099 Income?
When qualifying for a mortgage with a standard mortgage program, your lender will need to utilize a two-year average of your 1099 income. They will also need to count deductions against you. The specialty 1099 programs are geared to help individuals who may not have a two-year history of 1099 income or individuals who take significant write-offs on their 1099 income when they file their federal income taxes. The 1099 specialty loan programs will give you more qualifying income than a standard verification of 1099s.
DSCR Mortgage Loans For Real Estate Investors
Investor cash flow or often referred to as debt service coverage ratio loans (DSCR). These are super easy mortgage loans for investment properties. Many individuals who own multiple pieces of real estate utilize these programs to qualify for their next investment property. The main qualifications are a 25% down payment and then the future rent received must cover the total mortgage payment.
How Do DSCR Mortgage Loans Work?
As long as the rent receipt from the investment property will cover the new mortgage payment, typically that is all that is needed to qualify for this program. Individuals who own multiple investment properties, usually utilize federal tax write-offs to minimize how much they pay in taxes each year. These write-offs are very common but do come back to bite you when qualifying for your everyday mortgage program.
What Is Cross Collateralization Mortgage Loans?
Cross collateralization mortgage lending. Recently numerous investors have released programs that will allow you to use the equity in your current home to purchase your next home. They will front you cash to put an offer in on your next home while you still retain your current home. After you secure a contract on the next property, they will then sell your house (after you move out) and utilize those funds to pay back the money they have lent you.
So, the equity that you currently have in your home will be utilized as a down payment in your next home. The nice part of this product is you are 100% moved into your next home before you move out of your current home. This can help make the moving process seamless as you do not have to worry about your current home before you move into the next home. Not available in all states, so reach out to Gustan Cho Associates for more information.
Different Types of Mortgages For Doctors and Dentists
Special mortgage programs geared toward new doctors and dentists. Most newer doctors are crippled in student loan debt which may hinder their mortgage qualifications. The team at Gustan Cho Associates is excited to offer specialty mortgage programs geared toward these individuals. After an amazing accomplishment such as graduating from, medical school, you should not be hindered from buying a home.
Doctor Mortgage Loans
Many doctors will see a significant increase in income within just the first few years of graduation. That is why the specialty loan programs offer competitive terms for new doctors and or dentists. These programs typically start with a lower payment and gradually step up to a higher payment over the years as your income is expected to increase. As your career advances, your mortgage payments increase until the full balance is paid.
Different Types of Mortgages For Fix and Flip Investors
One of the most popular mortgage loan programs offered at Gustan Cho Associates is the fix-and-flip mortgage program for real estate investors. Fix and flip lending was very popular after the real estate crash of 2008. Even though home values are incredibly high right now, experienced fix and flippers are making a killing. Having the right mortgage lender who can provide you quick and easy financing for your flips and fix projects. We are able to set you apart from your competition.
Fix and Flip Mortgage Loans For Real Estate Investors
Gustan Cho Associates offer fix and flip mortgage programs that allow experienced parties to access a line of credit to use at their convenience. Even if you are on your first fix-and-flip project, you may still qualify for a loan program. For experienced fix and flippers, this program can be a miracle. You will constantly have access to substantial funds to quickly hop on new projects and access cash for repairs.
The best part of these programs is you only pay interest on the money you use, not the entire amount available. In order to qualify for these programs, you will need to send verifiable evidence of projects you have completed in the past. These programs can really help you generate large sums of money.
Second Mortgages
Second mortgages are offered at Gustan Cho Associates. Our mortgage loan officers are experts in originating and qualifying not just traditional loan programs but alternative mortgage options such as second mortgages. A few of our investors are starting to allow second mortgages.
What is a Second Mortgage?
A second mortgage allows you to access your home’s equity without changing the terms of your first mortgage. If you have purchased or refinanced your home in the past 10 years or so, you more than likely have a lower interest rate than the current market conditions. If you have extremely strong credit qualifications and an equity position in your home.
How Can I Qualify For a Second Mortgage?
We may be able to assist in tapping that equity with a second mortgage. Typically, these are in the form of a home equity line of credit. The easiest way to think of this mortgage program is a giant credit card attached to your home. You will be able to spend money based on a line of credit. You will only pay interest on the money borrowed.
You have a small monthly minimum payment with the ability to pay any amount of the principal balance. These mortgage programs were very popular before the real estate crash of 2008. You may even utilize a second mortgage to structure a deal in a way to no longer pay monthly mortgage insurance. These are often referred to as 80/10/10 in the mortgage industry.
How Can I Apply For Non-QM and Alternative Mortgage Programs?
Applying for one of these unique mortgage programs is incredibly easy at Gustan Cho Associates. Our team has set up a user-friendly mortgage application process. The first step is to reach out to Mike Gracz at 630-659-7644. This first phone call is important to understand your basic mortgage qualifications. Since Gustan Cho Associates offers so many mortgage programs, this initial phone call is a key step in the process. Depending on your qualifications, you may fit into your everyday Fannie Mae, Freddie Mac, FHA, VA, or USDA mortgage program.
Mortgage Lenders For Bad Credit Licensed in 48 States
If you feel you may be outside of those qualifications, our team has access to over 190 different investors who offer all sorts of mortgage programs. Above and beyond the products briefly discussed in this blog, our investors are constantly rolling out new programs. We strongly encourage you to reach out to our team of highly skilled loan officers to discuss your mortgage qualifications. Homeownership has always been the American dream and our team strives to make that possible for all of our clients.
