Mortgage Broker Dustin Dumestre
Mortgage BrokerForum Replies Created
-
Hey, Felix. There is no way anyone is going to touch this. The borrower needs to get their mid-score over 500 to even have a chance of making this happen. Once 12 months have passed on the mortgage late, the borrower will technically qualify for an FHA C.O. refi. LTV looks good, DTI would be the next hurdle. What are the recent lates specifically? I would suggest you get the borrower working on the mid-score now so you are ready to submit by the end of August 2023. A rapid re-score is your only hope to boost that score. If the borrower’s DTI is low, you might be able to have them open credit-building CCs with Cap One & Discover. They would need to be very disciplined and proactive with those credit-building new lines of credit. Usually, a 459 tells you they are not and will not be disciplined.
-
@alexcarlucci Is your client trying to execute a C.O. Refi to pay off the debtors named in Chapter 13? If yes, contact your borrower’s lawyer and ask them to email you the proof of payment leger. If that leger is good to go with no payments missed or showing lates, the lawyer will email you a letter on company letterhead stating so. Then the judge will more than likely sign off on the transaction. Usually, that will force the underwriter to comply. You will need a 24-month bank transaction statement from the borrower as well.
-
I would highly suggest you spend an additional two to four weeks studying before taking the national exam. Make sure the school you choose has options for mach tests and a study guide that can be printed. It may cost you $100 or more to print the review book. In my opinion, it is well worth it. If you have a significant other or spouse, get them involved. Have them quiz you from the review book.
-
I would assume a bridge loan would be the way to go in this scenario. If this is an income property scenario a 1031 Exchange is important.
-
In my experience these past two years, FTHBs feel like they are getting ripped off due to the steep rise in housing costs, mainly due to low inventory. Skyrocketing rates do not help either. It is our job to get our borrowers to understand the advantages of owning their first home.
-
This is something I always encourage my borrowers to investigate at the beginning of my conversation with them.
-
I have learned to make sure the agents involved, especially the selling agent knows what posting FHA-compliant home actually means. You will be surprised how many agents do not know what this means.
-
Traditionally, you would be looking at a HELOC or 2nd mortgage in the scenario you mentioned. If this were my client, I would talk to them about a “long-game” scenario. If they have enough equity to lower or eliminate the debt with the highest monthly payments, then you have options. The key to this is financial discipline once the initial transaction is completed. The 1st transaction will be a C.O. refi with a 30-year term. This will keep the new monthly payment as low as possible. The money the borrower will save monthly from a reduced monthly out-of-pocket expense will initially be used to supplement the slight increase in the monthly mortgage payment. The benefit is or should be, that their credit score will rise over the next 12 months. If there are additional proceeds left from the reduced monthly out-of-pocket expenses, those funds need to be allocated toward smaller debts being paid off during the following 12 months. After 12 months, the borrower has an increased credit score, which means you should be able to get them into a Conventional loan with no MI (instant savings) and you now look at two options for them. Either one more C.O. refi to cover a rate buydown or a traditional R&T. I usually suggest an R&T with a reduced term to 15 years and in our current economy, a rate buydown. The 15-year term will get them a lower interest rate, the Conventional loan saves money, (No MI) as I mentioned earlier, and the final option of the buydown drops the rate even further. Now your borrower has reduced their monthly out-of-pocket expenses, and is in a Conventional loan, with a shorter term, usually with no pre-payment penalties. Hopefully, the borrower has learned their lesson and stays within their financial means moving forward.
-
This boils down to the L.O. knowing what lender to go with and what lender or lenders to avoid.
