Real Estate Business Mastery Show – Elizabeth Navarrete, Debbie Camacho-Franco, Guest: Brandy Whitmire – S1E12
Guest Brandy Whitmire discusses how her experience as an investor and mortgage lender gives her unique insight into the conventional mortgage options available to investors. Everything from conventional loans to bank statement loans she lays out all the options most investors never knew they could use to minimize cost while maximizing returns.
2:43 – INTRODUCTION TO BRANDY
4:17 – ARE THERE OPTIONS OTHER THAN HARD MONEY AND PRIVATE MONEY?
8:26 – TRADITIONAL STYLE MORTGAGE
9:36 – NON-TRADITIONAL MORTGAGE PRODUCTS
15:20 – WHAT IS THE PRE-APPROVAL PROCESS?
21:55 – YOUR LOAN OFFICER SHOULD BE ANOTHER ONE OF YOUR TRUSTED TEAM MEMBERS.
25:00 – WHAT IS THE PROCESS TO GET AN INVESTOR OUT OF A HARD MONEY LOAN INTO A LOAN PRODUCT.
32:50 – YOU CAN DO MORE THAN 4 TRADITIONAL STYLE MORTGAGES.
37:40 – TRADITIONAL MORTGAGE FOR INVESTORS.
43:15 – WHAT ABOUT INDIVIDUALS WITH NO SSN?
47:58 – DEBUNKING THE MYTHS OF VA LOANS.
Institutional mortgage: The technical term is 30 year fixed, used interchangeably with the terms: Conventional loan: Fannie Mae, Freddie Mac. Government Loan: FHA, VA, USDA.
Non-Traditional mortgage products
Bank statement loans: have a lot of cash but need a loan. These loans will consider more than DTI (Debt-to-Income) ratio, or W2 Earnings if you do not get income from traditional sources.
What is the pre-approval process?
You fill out a loan application, Brandy gets on the phone with you to determine what else is needed, you send it her way, she gets everything together to get the best loan for your needs. The mortgage lender will guide you throughout the remaining process. However, the underwriters will need everything to protect their own interest, but a good lender should make you aware of this so you can have all the documents available upon request. Your loan officer should be another one of your trusted team members. Like having an experienced CPA, your loan officer needs to be a member of your team. If you have a relationship with them, they will look out for your best interest.
What is the process to get an investor out of a hard money loan into a traditional loan product?
If you have updated the property and now want to refinance or hold the property. Any time you are refinancing a hard money loan, the hard money lender gets paid off, and what is left gets paid back in cash to you, the borrower. Most investors don’t know about mortgage lenders to get money.
Buy, Rehab, Rent, Refinance, Repeat. Buy: As low as possible. Better if paid with cash or has good equity. Rehab: Update the property. Rent: Produces Cashflow. Refinance: Hopefully, home will be worth more and the loan you get will produce cash.
You can do more than 4 traditional style mortgages. Properties beyond the 4th will have different guidelines. If the property is income producing, the loan approval will be based on the asset, not your personal credit.
The 6 month and 12-month term. If you buy a home cash, you can refinance it in 6 months based off the purchase price. At the 12-month mark, you can take 75% of the present-day value.
What the lender will be looking at:
If using a Traditional mortgage for investors, the lender will check: W2, Debt-to-Income Ratio.
If self-employed (1099), you can still get a traditional mortgage, but it must be in the same industry you have been in. During the first year, you are likely to write-off many expenses, which will show a very low income. You are unlikely to get a traditional loan in that situation. If you have had the business for a while, they will average out the years, get a profit and loss statement.
If using Asset based lending for the self-employed, the lender will check: Income (in and out), Receivables, Money in the bank, Income producing properties.
Debunking the myths of VA Loans.
MYTHS: Agents think it will be too expensive for the seller, take too long to close, that the buyers are not as qualified.
REALITY: It is NOT more expensive for the seller, they close within the same timeframe as other loans, the average income of VA homebuyers is $76,900. VA Loans are 100% financing, no money down, the guidelines are easier than conventional or FHA loans. They are the least foreclosed upon loans. VA is a government loan, so they are only for primary home loans.
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