Non-Qualified Loans

Debt Service Coverage Ratio (DSCR) Loans

A debt service coverage ratio (DSCR) loan uses the cash flow from a property to qualify for a home loan rather than using income statements.

 For this reason, DSCR loans are the perfect opportunity for real estate investors to grow their portfolios when they do not have sufficient historical employment information or tax returns to qualify for a home loan. 

 A debt service coverage ratio loan has multiple benefits. Capital Mortgage offers DSCR loans today. Take a look at some highlights, and submit a form to get started. 

  • Available for purchases
  • Available for both cash-out or rate-term refinancing
  • No limit on the total number of properties
  • No cap on the number of properties included demonstrating sufficient cash flow 
  • Maximum loan amount $2.0 million
  • No personal income or tax returns are needed
  • Qualifications are based entirely on cash flow from one or more properties
  • Properties are vested in an LLC or Corp name
  • Occupied, vacation, and investment properties accepted
  • LTV up to 75% on Purchases
  • 30 Year Fixed Term Loans
  • 1-4 Family Properties

Bank Statement Loans

Bank statement loans are an excellent resource for individuals who are self-employed but are unable to document their income using tax returns.

Rather than supplying tax returns and income statements, the individual would use their average monthly deposit through bank statements to demonstrate reliable income.

Let’s take a look at some of the most frequently asked questions about Bank Statement Loans. Interested in learning more about offering Bank Statement Loans? Talk to Capital Mortgage today to learn more about how we can help.

What Are Bank Statement Loans?

Bank statement loans are a different type of loan than your traditional mortgage loan. Borrowers provide bank statements rather than tax returns.

Monthly deposits are averaged out and a percentage is determined as the average monthly income to be used on the loan to qualify for a mortgage.

How Many Bank Statements are Needed to Apply For A Bank Statement Loan?

Depending on whether the account is business or personal, 12-24 months of bank statements are required.

Are these the same thing as “no-doc loans”?

In the past, “stated income loans” or “no-doc loans” were easy paths for the self-employed to follow. Though after the 2008 mortgage crisis, these programs ceased to exist.

While entirely different, bank statement loans are the safest and easiest loans for self-employed borrowers as well as the lenders that serve them, alike.

Advantages of Bank Statement Loans

  • Bank statement loans allow for self-employed business owners as well as 1099 contractors to qualify for mortgages
  • Lenders allow you to qualify by supplying them with ONLY bank statements.
  • Interest rates start at 3.5% APR
  • LTV up to 90%
  • DTI up to 50%
  • NO PMI or mortgage insurance
  • Down payment requirements are as low as 10% in some cases.
  • Bank statement mortgage rates are just slightly higher than conventional rates
  • Typically no pre-payment penalties
  • Available in all 50 states
  • Loan up to $3 million

Potential Cons of Bank Statement Loans

  • Self-employment must date back at least 2 years.
  • Low credit typical results in higher down payment requirements.
  • Rates are slightly higher than conventional mortgages.
  • Not all lenders offer bank statement loans
  • Not available in government loans such as FHA, VA, or USDA

Fix & Flip Loans

What is a fix and flip loan?

This loan refers to a popular financing option given to a customer purchasing a distressed property to renovate with the express purchase of selling it. In recent years, we have seen a massive influx in more casual real estate investors have entered the market in hopes of “flipping” distressed properties. 

What often happens is a distressed property is sold at auction for cash, or the seller offers a a better deal for an all-cash purchase. In this situation, the borrower needs the money for renovation, and will pull it from the 100% equity in the home, in the form of a cash-out refinance.

With real estate investment, work on the property must begin soon after closing. These tend to be private lenders that have hard money fix and flip loans with short repayment periods, which perfectly fit most flippers’ project timeframes. 

Fix & Flip Lenders are also more likely to offer loans with no money down, no credit check, or to borrowers with bad credit. Some of these lenders also offer fix and flip loans that cover up to 100% of the rehab costs.

Traditional vs. Fix & Flip Loans

Unlike traditional mortgage loans, fix & flip loans come from private lenders who take into consideration the “big picture”—the property’s purchase price, the scope and price of the work that needs to be done, and the projected resale value of your property post-flip. It also means if something goes wrong and you’re not able to repay the loan, the lender can take the property as collateral and make their money back.

Another key differentiator is that rehab/fix and flip loans typically don’t have early repayment penalties, meaning you don’t have to worry about getting dinged by a lender should you be able to pay off your loan in advance.

Non QM Portfolio Jumbo Loan & Conforming Program

Capital Mortgage is happy to offer Non QM Portfolio Jumbo & Conforming Loans with up to 80% financing. These loans work great for those looking for non-traditional ways to qualify for a Jumbo loan.

What is a non-QM Jumbo Loan?

Like a qualified Jumbo loan, a non-QM jumbo loan is a mortgage that exceeds the Fannie Mae maximum of $510,400 on a single-family home. Unlike a qualified Jumbo loan, a non-QM Portolfio Jumbo loan uses bank statements and other methods of authorization. 

Highlights of Non-QM Portfolio Jumbo Loans From Capital Mortgage

  • Bank Statements
  • Asset Depletion
  • DSCR
  • 1 Year tax returns
  • Business Purpose
  • Interest Only
  • No max cash-out
  • Greater than $4 Million
  • LLC or Trust are OK
  • Cross Collateral is OK
  • Lite Doc Non QM
  • Foreign Nationals OK

Bridge Loans

A bridge loan is a short-term loan used until a person or company secures permanent financing or removes an existing obligation. It allows the user to meet current obligations by providing immediate cash flow. Bridge loans are short-term, up to one year, have relatively high-interest rates, and are usually backed by some form of collateral, in this case – real estate.

How a Bridge Loan Works

Lenders can customize these loans for many different situations. Bridge loans help customers purchase a new property while they wait for another one to sell. 

Borrowers use the equity in their current property for the down payment on the purchase of a new property. This happens while they wait for their current property to sell. This gives the customer peace of mind while they wait.

It is important to note that these loans normally come at a higher interest rate. And those who still haven’t paid off a mortgage end up having to make two payments—one for the bridge loan and for the mortgage until the old home is sold.

Typically, lenders only offer real estate bridge loans to borrowers with excellent credit ratings and low debt-to-income ratios. Bridge loans roll the mortgages of two houses together, giving the buyer flexibility as they wait for their old house to sell. Lenders only offer real estate bridge loans worth roughly about 80% of the combined value of the two properties. This means the borrower must have significant home equity in the original property or ample cash savings on hand.

Bridge Loans vs. Traditional Loans

Bridge loans typically have a faster application, approval, and funding process than traditional loans. However, in exchange for convenience, these loans tend to have relatively short terms, high-interest rates, and large origination fees. Generally, borrowers accept these terms because they require fast, convenient access to funds. They are willing to pay high-interest rates because they know the loan is short-term and plan to pay it off with low-interest, long-term financing quickly. Additionally, most bridge loans do not have repayment penalties.

Individual Tax Identification Number Loans (ITIN)

Individual Tax Identification Number (ITIN) loans are for people who are not eligible for Social Security numbers. ITIN’s are issued to both resident and nonresident aliens for tax-reporting purposes. Let’s take a look at some of the advantages and disadvantages of ITIN loans.

Advantages

  • No Social Security Card Needed
  • No Green Card Needed
  • Use it to refinance Mortgages
  • You Can Build Credit with an ITIN
  • It is Better than Hard Money Loans
  • The Application Process is available online

Disadvantages

  • Time Constraints – Can take up to 4-6 weeks to obtain an ITIN
  • Higher Interest Rates
  • Higher Denied Rates
  • Most Banks are not providing them
  • Higher Down Payment

Cap Express Loans - Limited Income Documentation Loans

No-income verification mortgages, also called stated-income mortgages, allow applicants to qualify using non-standard income documentation.
While most mortgage lenders ask for your tax returns, no-income verification mortgages instead consider other factors such as available assets, home equity and overall cash flow. This makes it easier to get a home loan if you’re self-employed or rely on seasonal commissions.

Does A Cap Express Loan Make Sense For Your Borrower?

No-income verification mortgages are worth exploring if your borrower is self-employed, has seasonal income streams, or generally has trouble qualifying for a conventional mortgage loan. All of these scenarios can make it complicated to document your income, which makes the simplicity of a no-verification loan ideal.

However, borrowers with low income should not use these loans as a way to disguise legitimate financial standing. Borrowers should only apply for a no-income verification mortgage if you can actually afford to make payments. These loans should be seen as a solution for cutting down paperwork, not for avoiding the common-sense question of affordability.

Most Common No Doc/Limited Income Documentation Loans

There are several different methods offered for limited income documentation borrowers. Below are the most common programs and who might benefit from them.

Bank Statement Loans

Lenders calculate income based on an average of deposits made into your personal or business accounts over a 12- to 24-month period.

No-Income, No Asset Loans

Available only for investment properties, current no-income, no-asset (NINA) loans are approved based on projected rental income for the property being purchased. Typically, as long as the rent covers the new mortgage payment, no income or asset documentation is necessary.

Asset-Based Mortgages

Lenders qualify borrowers based on up to 100% of liquid assets divided by the loan term. 

Top 10 Reasons to Use Capital Mortgage Services of Texas

  • Capital Mortgage Services of Texas is a Mortgage Banking Firm, not a Broker
  • Approval in Minutes
  • FHA Direct Endorsement Lender
  • Table Funding
  • Best Service in Town
  • Electronic Access to Current Market Conditions
  • Home Owned and Operated
  • Lowest Rates in Town
  • Credit Freedom
  • “We Can” Attitude

At Capital Mortgage Services, we’re happy to be a part of your American dream.

With approval and processing times that rival anyone in the industry, we’re thrilled to be a part of that dream with you.
CONTACT US TODAY

©2021 Capital Mortgage Services of Texas, all rights reserved.
Siwell, Inc. dba Capital Mortgage Services of Texas NMLS 149169
Licensed by the Department of Business Oversight under the California Residential Lending Act

MORTGAGE BANKER DISCLOSURE

Residential Mortgage Loan Originator: Siwell, Inc. dba Capital Mortgage Services of Texas
Organization NMLS ID: 149169
Residential Mortgage Loan Officer Royce Lewis NMLS ID: 151122
Residential Mortgage Loan Officer Linda Lewis NMLS ID: 151120

CONSUMERS WISHING TO FILE A COMPLAINT AGAINST A MORTGAGE BANKER OR A LICENSED MORTGAGE BANKER RESIDENTIAL MORTGAGE LOAN ORIGINATOR SHOULD COMPLETE AND SEND A COMPLAINT FORM TO THE TEXAS DEPARTMENT OF SAVINGS AND MORTGAGE LENDING, 2601 NORTH LAMAR, SUITE 201, AUSTIN, TEXAS 78705. COMPLAINT FORMS AND INSTRUCTIONS MAY BE OBTAINED FROM THE DEPARTMENT’S WEBSITE AT WWW.SML.TEXAS.GOV. A TOLL-FREE CONSUMER HOTLINE IS AVAILABLE AT 1-877-276-5550.

THE DEPARTMENT MAINTAINS A RECOVERY FUND TO MAKE PAYMENTS OF CERTAIN ACTUAL OUT OF POCKET DAMAGES SUSTAINED BY BORROWERS CAUSED BY ACTS OF LICENSED MORTGAGE BANKER RESIDENTIAL MORTGAGE LOAN ORIGINATORS. A WRITTEN APPLICATION FOR REIMBURSEMENT FROM THE RECOVERY FUND MUST BE FILED WITH AND INVESTIGATED BY THE DEPARTMENT PRIOR TO THE PAYMENT OF A CLAIM. FOR MORE INFORMATION ABOUT THE RECOVERY FUND, PLEASE CONSULT THE DEPARTMENT’S WEBSITE AT WWW.SML.TEXAS.GOV.

Hawaii Borrowers Public Information Notice Requirement

Kansas Licensed Mortgage Company