good morning

good afternoon

good evening

wherever you are and whenever you're listening

I wanna congratulate you

on taking steps towards bettering yourself

educating yourself

this is mortgage mindset

my name is Hunter Boyd

director of sales for the Sherry Riano team

today we are joined by director of operations

Chris Brazell

what's going on Chris

greetings everybody

hope you're doing well

doing good man

doing good hey look

we're excited today

we're gonna be continuing our non QM series

we're gonna be talking about bank statement loans

uh Chris why don't you do just a soft intro

what is a bank saving loan

who's eligible for it

can I go into that

absolutely so these loans are geared towards our self

employed borrowers

and what they are is it's

we all know there's tax breaks out there

to write off expenses and things like that

to lessen your tax burden

when you do file your taxes at the end of the year

on your Schedule C

and so you know

take advantage of those tax breaks

write off all your expenses to minimize your tax burden

um to show you know

as little net income as possible

and then what we do is we don't even look at

tax returns for income qualification

literally gonna use your bank statements

and use that information to qualify you

that way you can

you know kind of have your cake and eat it too

so to speak

where you do minimize your tax burden by

writing off your expenses and still get qualified

for a mortgage based on the income coming in

based on deposits into your bank account

okay okay so uh

we do want to start this podcast as well by stating

hey look this is a non qm loan

these these investors

they house their own loans

they can change their guidelines literally overnight

so before you

ever place an offer with a bank statement loan

we encourage you

whether it's share your Rihanna team or another

reach out to your lender

make sure that loan structure that

that loan officer had that client set up in

is currently still available

we just really wanna push that with these products

just because things can change so quickly um

so let's get into the little bit of the meat of this um

Chris kind of give us some highlights of this program

um just loan options

loan amounts

uh LTV credit score

just let's let's go in

man yep so uh

with this program

we can go as low as 6:40 credit

which is great

so it does have a lot of flexibility in

the credit scores

you can do as little as 10% down

which is also great

so this does work for primary residents

second homes

investment properties

um the the uh the

the use of the home can be all three of those as well

and so the cool thing too is

you two year history as far as us being self employed

but we also have an option

now that just rolled out recently

with as little as one year self employed history

now we will need business bank statements

for that particular one yep

but as little as one year of being self employed

and we can use those 12 months of business

bank statements and get the average

deposits that you get

and that's gonna be your qualifying income

that's phenomenal

yeah so it is

30 year fixed

it does also

have an option with a 40 year interest only

so again lower those payments

get you in the house

so there's a lot of variable

options on this particular program

which is great

so talk about the 40 year year interest only

just a little bit there

what does that monthly payment structure look like

for a client

what does that mean to someone that

that's maybe considering that as an option

sure so the amortization is

is stretched out over 40 years

but versus your typical 30 year

that's gonna lower your payment

and then with it being interest only as well

it's gonna lower your payment even more

that's gonna help your qualification for

our clients that need a little bit more flexibility

with the debt income ratios based on those deposits

so it's you know

it's not a permanent loan

even though it is a 40 year term on this

since it's interest only

it's just a

it's a tool

to get you in the house

you know we're gonna eventually wanna

get you into a different loan program

or you're gonna wanna make those principal payments on

your own outside of the normal minimum

monthly payment on the mortgage

just to work towards paying down that uh

loan balance

but it gets you in the house

start gaining appreciation on the house

so you're gonna

it's a win win

no matter what

it's just it's

one of those tools with a lot of flexibility to get

people in a house that may not have

enough deposits to qualify

on a normal

fully advertised 30 year payment

that's good

and I think that's also really helpful because

and when you talk about non qm loans

you're not getting

you know traditional market rates

out there you know

you're not gonna get the

whatever is available for conventional or FHA

you know you're gonna have

a little bit higher price

and that's because

the investor that's housing that loan

in addition to housing it

and making their own rules rules

they also determine their own interest rates

um I think that's important remember

especially when talking about like a 40 year am um

true you know

interest only option there

you're gonna pay a little bit higher interest rate

but that monthly payment is still

most likely gonna be lower

because it's not advertised over a 30 year period

that's correct

yeah you don't wanna think

compare these to

you know normal conforming

rates right now

so if you hear about where interest rates are right now

and all of these non

qm products

when you start

layering the risk layers

like layering it as a bank statement

loan only due in 12 months

maybe instead of 24

layering on

the 40 year interest only

things like that

it is gonna bump

the rate up

but again it's just

if somebody

who couldn't

get into a loan before

couldn't qualify

you know they

may not be upset with

the higher interest rate

because it still

gets them in a house

without having to show

you know that

income on a

tax returns

for two straight years

on a normal

conforming loan yep

now we pride

ourselves on

our speeded

availability

especially on like

things like weekends and stuff

if I've got a client

you know I'm agent

I'm bringing a client to

get pre qualified with us

what's my expectation

for timelines

and stuff like this

you know is this something that

can happen on a Sunday afternoon

um you just

is there a little

more prep work

what's your

understanding of that

yeah that's a great question

because like you said

we typically move pretty fast

you know an

application comes in

we usually knock it

out in about an hour

to be honest with you

yep um on these loans

so we need a little

bit more up time

more time up front

so the reason

for that is

we do have to take

the business

bank statements

or the personal bank statements

whether be 12 or 24

months again

and send those

statements directly to

the investor

how that works is

we send it to

the investor

the investor comes back

and says what

the qualifying income is based on

the deposits they see

and then we know what we

can get you qualified

for based on

the interest rate

the structure of the loan

and what the investor says

they have verified

in deposits

in those statements

and so on these

it's more like a 48 hour turn time

with initial prequalification okay

once we have received

all the bank statements

and so we do need

the full 12

months or 24

months and again

whichever is better for you

if you can give

the 24 months

it's gonna give

you a little

bit better renewed

interest rate than just a 12 months

why is that

um just because it's

it's showing more consistency on

the deposits okay

and so when

you're stretching it

out over those two years

it just shows that hey

you have been in business

your two plus years

as a self employed borrower

and you consistently have those deposits going into

your bank statement

so it's just a little strengthening factor

which gets you

access to a slightly better pricing

than just a 12 month

but once you

get those statements to us

so we upload them through the portal

directly to

the investor

and then again

it takes about 24 to 48 hours

for the investor to review

and spit back what they

they deem is

the qualified income

that we can

use on that loan

and then we

can back into what we

can qualify

the clients for

as far as max

loan amount

and things like that

and then we know what

they can start going

look for houses for

all right so

talking about timelines here

if an agent is writing up a contract

you know they're using the

Chery on team

offer letter

they're not

getting anything

it's not gonna

say anything

other than you know

traditional

offer to purchase um

that kind of thing

what's a good

expectation

for a closing period

on one of these loans

is this a quick turn

is this a little bit longer

are we talking USDA

VA in worst case scenario

where we at

yeah I would say

minimum 30 days

but more likely

closer to the 45 day

just anytime

we deal with these

not QM loans

where we have to go directly to

the investor

a little bit of the

power that we wield is out

is outside of our our

our normal turn times

because with

all other loans

conforming FHA

you know the normal

you know bread and butter

loans that we do

99% of the time

we do everything in house on these

we do have to get

the investors

ultimate approval

on these loans

because it is something that they're

gonna portfolio

so they have to

put their seal of

approval on it

and so with that

anytime we're dealing

with anybody that's

outside of our office

so to speak

we want to build in a little

bit of extra time in there

because not

everybody moves as fast as we do

unfortunately

and so we have to build that in

and also a little

bit more due diligence is done

up front with

to make sure that

we have the loan structure

properly based on

the qualifying income

on those statements

and things like that

so just give us a little

bit more time

a little bit more breathing room

on these types of loans

and I would say that

that's across

the board on

all of our non

Q1 products

just to give us a little

bit of breathing room with

the investor

that's it that's it

if you feel

there's a situation where

you may lose a deal

if you don't give a 30

day talk to us

let us know

that at least

gives up gives

us an idea of like

okay soon as we

get this contract

we have to hit

the ground running

immediately

we always want to do that

but we also wanna relay that

information to

the investor as well

um what I love about this as well

there's I mean yes

there's an income

cap but in the

triangle market

uh there's a uh

not an income cap

but a loan cap

loans are up to

three million dollars

yeah that's

phenomenal I mean

for most homes

in the area

that's gonna be

captured in that

we do need a minimum

of 150 thousand dollar

loan amount

that's an investor overlay

it's not anything that we control

the investor just

kind of says

look in order

for us to make money on this

in order for this to be a

profitable loan

they need to be

at least 150,000

um if you've got a loan

amount over

1.5 million

kind of low way with other loan types as well

like conventional stuff

if you have million

million plus loans

you're generally gonna need a second appraisal

or a CDA done just to kind of confirm hey look

here's multiple sources confirming that value

still an incredible product for us

um very excited

it's closely related to the 1099 loan

options that we have as well for our 1099 employees

however this

cause this can be a little bit more of a tax break

you know maybe a little bit more beneficial for the

self employed buyers if you know

they're filing their taxes a certain way

yeah so if we get a 1099

obviously that's

that's all gross income right there

and so we we do use an expense factor

and what that means is that um

we take the 1099 or the gross income on deposits

on the bank statements and

and they do factor in a little bit of expenses

but if you're in

a job that doesn't take a lot of expenses

like for example

one of the most recent ones we did was with some

somebody who was a nail technician

yeah and so she

you know had her

she worked out of somebody's office

but she had her own clientele

her own book

a business so to speak

and so there were a lot of expenses in that

and so we had her CPA write up

a letter saying that she has minimum expenses

and with that

we were able to use most of the gross

deposits that she had going into her bank account

and we're able to get into

get her into a house um

so little things like that

we can work with these

because of the fact that these are portfolio loans

with our investor

they're very willing to listen to us

and what I mean by that is a lot of common sense

each one of these is gonna be a little bit different

so if we work together on this

you know and find ways to get it done you know

our investor's job

just like our job and everybody else's job

is to get people into houses

so they're willing to listen to us

this is also real quick

this is also one of the few loan types where a profit

and law statement can actually help

in most cases

a profit from law

statement is really just a piece of paper in the file

unless it hurts the file

it can't ever really help anything

it can only hurt the loan

in a bank statement loan

a profit from law statement

is actually a valid form of income verification

so it can actually provide strength for

the file to get closed

which is always great

yes and so when you show a P&L statement

like hunter said

you know a lot of times

it's not worth the paper it's written on

because it does it

you can change anything

up until the point you file your taxes

yeah it's a Google DOC

yeah it's exactly

so it's a strong piano

though will help support those deposits

going into your bank statement

then we'll show hey yeah

this person is grossing a lot of income on

on their particular job

and so it will help them with the income verification

awesome well

thanks Chris

for being here today

I appreciate it look

if you're enjoying this content

if this is helpful or beneficial for you

if you're learning things

hit that like

hit that follow

hit that subscribe

you know we wanna be here to help you get more deals

close more loans

the more education

the more products you know

that's out there

the more people that

you can help bring to the closing table

this has been mortgage mindset

we'll see you next Wednesday

the Mortgage Mindset Podcast is hosted by the

sherry riano team at Clear Mortgage

powered by City First Mortgage Services LLC

sherry rianos

NMLS ID 7 1 7 7 4

visit us at thesherryrianoteam.com

for more information about our team

the opinions expressed on the show by

the host of their guests are their own

and do not necessarily reflect the views

and opinions of Clear Mortgage

or City First Mortgage Services

please note that

Clear Mortgage is powered by City First Mortgages LLC

and their animal s ID is 3 1 1 7

Clear Mortgage and City First Mortgage Services is

not an agency of the Federal Government

is not acting on behalf of

or the direction of HUD FHA

City First Mortgage Services is an Equal Housing Lender

programmes rates and terms

subject to change without notice

underwriting terms and conditions apply