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and we are excited to share with you today

we're gonna be talking about asset qualifier

and ITIN mortgages

how those can help you close more deals

every single month but before we go any further

we are joined today by Chris Brazell

director of operations for the Sherry Riano Team

what's going on how we doing today

doing good man doing good

I'm excited uh

we are on the final episode of our non q m

miniseries that we've been talking about

we've discussed bank statements

1090 nines DSR's all the good stuff PNL loans um

and I think these last two are the

some of the ones that we hear of the most honestly

uh between asset qualifier

and what that means in I ten buyers

so uh before we get into those

we have to give you our non qm disclosure

check with your lender before you ever make an offer

with one of these programs

these are not Fannie Mae Freddie Mac backed products

so

this is something that can change literally overnight

um we will always wanna make sure that

that client still has the

same structure available to them

the rates not push them outside of guidelines

just all the things that come along with non QM

so before you ever utilize one of these products

to get your clients into a home

or buy their next home

please check with your lender first

um without further ado

let's talk about asset qualifiers

uh Chris

can you tell me a little bit about what it is

yes so

this is a loan that

we're not gonna be using any kind of income

for qualification

this is geared towards the type of person that you know

may be very tired maybe they work part time

maybe it's seasonal work or uh

there are self employed and they don't have any income

but they have a lot of assets

so it's based

for somebody that is sitting on a lot of retirement

accounts you know investments

uh portfolios

things like that somebody that just has a lot of money

that they have access to

but they don't wanna use it to pay cash for the house

the reasons they may not wanna pay cash for the house

is 1

mortgage interest is is deductible on your tax returns

2 is they wanna keep their money in their um

in their portfolios to gain money for them

as far as investments and things like that

but it's a way that we can look at their assets

and get them qualified for a mortgage

okay so similar to a DSCR loan

we talked about a couple weeks ago

where no income required on the application

the application on a lenders

s side of things does look a little funky

cause there are no DTIs for DSR

you will have that

I guess with an asset qualifier debt income ratios

but it really kind of

it's more determined on how much assets is available

to the client correct

yeah what for example

I did a loan

this type of loan for somebody a little while back

where the guy busted his butt

did a great job in his in his industry

I believe he was in it like a software developer

sold the company he made a lot of money

and so he was sitting on a lot of money

and he retired at an early age

but he wanted to buy a nice big house well

he had the assets

he could literally write a check and pay for the house

and cash didn't want to

and so we put them in one of these loans okay

okay um

is this something you can utilize to buy

like a second home the best property

uh talk to me a little bit about that

and how that is maybe different um

between the home types yeah

so for an asset qualifier

it's gonna be your primary residence only okay

and so we you do have to

they want you to have skin in the game as well

so one this is gonna be a little bit higher um

minimum credit scores than our other nine QM loans

they want you to have a 700 credit

show that you can maintain good credit

pay your bills on time

and minimum 25% down on a primary residence

so that

the loan to value is gonna be a little bit lower

than our other 9Q m loans again

just to get skin in the game for the borrower

little bit higher credit score uh

requirements and it

the only home it works for is a primary residence

but can go up to a 3 million dollar purchase on these

okay 3 million dollar loan amount excuse me

so which is a higher purchase price

but you know we have a lot of flexibility in those

higher purchase prices as well okay

one thing I do like about this program is

it does have an interest only option

in an area where we're appreciating so much

maybe someone just wants the absolute minimum

they're gonna ride the way for the appreciation

but they don't want to have to pay down on that

mortgage you know that increase monthly payment

they do have an interest only option for this

which is really nice um

especially for someone maybe that's a little bit older

they've spent their life working

now they wanna enjoy the fruits of it

they don't wanna

type as much monthly income as possible

correct and

and they know they're still gonna gain the appreciation

you know I think it's hovering around 5%

appreciation in the area right now

so even if you're paying interest only

not paying the principal balance down on the loan

you're still gonna increase your equity in the house

just by the appreciation in this area

so it's it's a win win get you in the house

you know right off that mortgage interest

when you do your tax returns

and still gain appreciation

on the home that you're investing in

that's good that's good

why do you think and this is probably subjective

but why do you think um

this program type requires more of down payment

and a higher credit score than

I think DSR was like you know

six 80 or six 60

and then only 15% down for some programs um

is it because you think the investment properties are

income producing and so like there's there's that

you know consideration or or what

that's correct so all of our other non

qm loans have some sort of income shown

whether it's the property that produces the income

by the rental uh

comp schedule you know

at 1099

we're still looking at the clients making income

on 1090 nines um

you know PNL loans again we're still showing that

the business is making money via the PNL

on these it's literally no income

and so we don't have a source of income at all

excuse me

and so it's just based off the assets of the borrower

and so without the income

it's gonna have a little bit stricter

and tighter guidelines and again

I'd like to use the same more skin in the game

and from a mortgage standpoint

why they want people have more skin in the game

it's harder to walk away from

once you put that 25% down

you're you're invested in this house

yeah and you're not just gonna let it go by the wayside

so from an investor's point of view uh

they give you the loan you put 25% down

you walk away

the investor makes 25% return on their on their

on their mortgage that's it

exactly

resell the house on the market cause the you know

the commodity is the home that the lean is placed on

for the mortgage and they make their money back

and so they want you to have that uh

25% built in equity in the house

outside of the required down payment

this loan I think reminds me of the Wah

Wah West of pre 2,008 more than anything

just because

there is literally no income mentioned anywhere like

you know it's not income producing property

the borrower does not have an income

they just got a stack of bread

they're willing to lay down

that's right yeah

and so how that works just kind of real quickly

touch on the nuts and bolts of it yeah

is that any we still pull credit

obviously we need to have the minimum credit score

but any debt that shown on your credit report

plus the proposed mortgage payment

as long as you have enough assets

to cover those payments for the next 60 months

which is five years

and we take 75% of the total assets

we can't utilize all of it

you know we look at like uh

you know

variable investments like stocks and things like that

they could lose value

so we use 70% of the total assets

and as long as you have enough to cover the payments

of everything for the next five years

based on those assets you qualify

it's literally that simple

so I mean let's do real numbers

there's an example

you're sitting on a million bucks and we use 75%

so we're looking at 750 grand over the next five years

broken up over 60 months which is 12 months in a year

five for five years you're looking at 12,500 bucks

that right there becomes your qualifying boom

you got a loan if your mortgage famous less than that

that's correct that's got nuts

that is nuts the less documentation for those bar wars

tax returns obviously cause no income

sure

all we're looking at is that is the assets to qualify

okay cool

yeah alright let's switch gears a little bit um

we we do hear from this a lot uh ITIN programs uh

so ITIN mortgage loans uh

talk to me a little bit about that um

what are we looking for as far as you know uh property

is it a primary investment

are we looking at you know condos

or what's the debt to income

what's the flexibility there

um what what what do we have

yep

so let me start by first saying what 9 10 is cause yeah

people may not know that so basically what that is

is an individual tax ID number and it's simply stated

it's somebody that has a tax

ID to work legally in the United States

but they do not have a Social Security number okay

and so they have a tax ID number

so that they can pay their taxes on an annual basis

just like they would um

with a social security number

but they are legal resident that works in the US

but do not have a social security number

and so this is gonna be primary residents only as well

so these two programs are talking about today

unlike the other programs we talked about in the non

QM series our primary residents only and so we're good

it does allow for non warnable condos

single family homes of course

and so there is a lot of flexibility in these

but it's that it's for

geared towards

somebody that does not have a Social Security number

in the United States okay

all right and um

what I really like about

especially the asset qualifier

but in addition to itin um

you you can kind of couple up non qm products together

like the asset qualifier

I feel like is a great product to get you into a home

just like ITIN gets you into a home

it doesn't allow for income producing

but for someone who's maybe has an ITIN right now

but they're going to get their Social Security card

later they can then turn around

after getting a home themselves

a couple years later

use a DSR loan to get a investment property

or an asset qualifier

can you qualify buying their own home little bit later

they turn back around get another investment property

to make some money on another property and

and build essentially build their portfolio

residential portfolio um

just strictly through non QM

without really ever looking at tax return or pay stuff

for those for asset qualifier and DSR

that's correct yeah

this is a good way for people

to get into the real state market

that otherwise may not qualify

through the conventional conforming

Fanny made Freddie Mac rules

that box that we talked about

that people would have to fit in with

as far as debt to income ratios

enough income stay within those you know

45 to 50% debt to income ratio limitations

um have reserves and things like that

so yes this is a way for people to dip their toes in

the real state industry

that may not qualify conventionally

and they can you know

piggyback different non q m loads

we've worked with clients

that have lived in the 9QM world for years yeah

built up their portfolio via 9QM loans

whether it be their primary residence or like you said

get into the investment property portfolio mindset

and then build up you know

the real state you know

their doors is what the is what they use count doors

that's it they count their doors

get their more doors under their wing

and start making money that way

it's a great tool that's awesome

and one thing I do wanna mention with the ITIN program

because it is something that we've seen

relaxed over the last few years

um maybe especially in the last 12 months is one

it is available for purchase and cash out refinance

it also allows for right now

remember the nondis QM disclosure

but for right now allows for a 50% dead income ratio

which is one of the highest I've seen in a while

I know they used to have it at 40

they backed up to 40 43

45 um so if someone has some equity they're sitting on

they want to take advantage of that

they can get a cash out

refinance with the ITIN program

and allow their detain

commercials to go up to 50% right now

which is really great

could help someone like we've talked about

you know maybe invest in another property or something

yep

and slightly lower credit scores on this one as well

6:40 which is great

so a little bit of flexibility there

and just like the other non Korean programs

less seasoning on what we call

you know credit hiccups or things like that

so people that have had bankruptcies

foreclosure short sales

do you lose sale things like that

you know Phantom

a Friday Mac is four to seven years on those different

um you know historic or his credit history events

and these is one year

two years that's all which is great

so again if you're not gonna qualify for the fanny made

Freddie Mac loan for more reasons

I'm one such as

needing the seasoning from the time lapse of the

of the credit hiccup to where you wanna buy

these

allow people to get in a lot quicker than Fanny made

Freddie Mac loans that's great

that's great once again these are non qm products

please talk to your lender before you submit an offer

with one of these offer letters um

we wanna make sure that the available terms that we

were discussed originally

with your client are still available

so then when they go under contract

they don't have any unexpected um

change UPS to the what they had in mind uh

this has been mortgage mindset

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talked about the taxes and things like that

um that are happening in Wake County

we'd love to have you on

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we'll talk to you next week

the Mortgage Mindset Podcast is hosted by the sherry

Riano team at Clear Mortgage

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