Our Closed-End Second Mortgage offers a tailored solution, allowing borrowers to leverage the equity in their primary residence without disrupting their current low-rate first mortgage by using bank statements to qualify for a second mortgage for their primary residence. Here is a recent loan that we closed.
Scenario Overview
Consider a self-employed borrower aiming to consolidate debt using the equity in their primary residence. With a first mortgage locked in at an attractive 3.5% interest rate, the borrower is keen to maintain this advantage. They boast a strong 749 FICO score and a Combined Loan-to-Value (CLTV) ratio of 85%. However, their debt-to-income ratio stands at 55% based on net income reported on their tax return, posing a challenge for traditional loan products.
The Non-QM Solution
Enter our closed-end second-lien loan product, a game-changer for borrowers in similar situations. By shifting the focus from traditional tax returns to 12 months of business bank statements, this innovative solution recalculates the borrower’s income, reducing the debt-to-income ratio to a more manageable 47%. This adjustment not only facilitates debt consolidation but also enhances the borrower’s cash flow position, all while keeping the first mortgage intact.
– Primary Residence CLTV: Up to 85%
– Second Home and Investment Properties CLTV: Up to 70%
– Debt-to-Income Ratio: Up to 50%
– Income Verification: 12-month bank statements for self-employed borrowers
– Minimum FICO Score: 680
This product is designed to empower self-employed individuals by providing the flexibility needed to manage their finances effectively. By allowing alternative income verification methods, we open doors to opportunities that might otherwise remain closed.
Are you a self-employed borrower looking to consolidate debt while maintaining your current mortgage terms? Our Closed-End Second Mortgage could be the solution you need. Contact us for more information about our bank statement program that works for both second mortgages or as a home equity line of credit.
