I was visiting a real estate office last month; ran into a real estate broker I’d never met and introduced myself. She’s a well-established broker who has been in the business for 14 years. Naturally we were talking shop as mortgage and real estate professionals do. She was going through a few deals she’s working on and then, almost as a throwaway line, said, “oh and there’s Tony who needs financing, but he won’t get approved for a loan.”
I was intrigued and quickly stopped her. “Wait, why? What’s wrong with Tony?” She went on to tell me that Tony is self-employed, has fluctuating income and has already been turned down by three other lenders.” I told her to have Tony give us a call. There are many non-traditional programs out there that even seasoned real estate professionals don’t know about.
Here are a few examples of deals we’re working on just from the past month where clients were previously turned down by other lenders.
Tax returns not looking so hot? No problem.
The Bank Statement Program.
And this is the program we used to get Tony the loan he needed. As a self-employed business owner, Tony is constantly assessing ways in which he can grow his business which often requires him to increase his expenses. It’s like the old adage says…” spend money to make money.” By doing this, one’s tax returns can show lower income than the previous year, no income in some instances, or in Tony’s case, negative income. In reality though, Tony’s business was still making money – and a lot of money. We were able to prove this by requesting 12 months of bank statements for his business which showed us his company’s cash flow. This is acceptable through our proprietary bank statement program. We totaled up all the deposits and derived an income from the bank statements without needing his tax returns. This is a creative solution to help self-employed clients.
No income but tons of money in the bank? We got you.
Asset Qualifier Program
Similar to the bank statement program, we can help someone who not only isn’t showing a lot of income, but someone who has no income coming in at all. This is a great program for those who are retired, or someone who recently inherited money or for someone who sold a business and is now sitting on a lot of cash. Essentially, the bank will total up the assets one has in a savings/checking account, mutual funds, and brokerage account (stocks and bonds) and derive an income based on those assets. That’s it. We’re working with Lara right now who sold her business right before the pandemic and hasn’t had anything steady since. She found her dream home and instead of pulling more money out of the market than what she’s comfortable with and selling at a loss, she’s getting financing through this program.
Not from the US? We welcome you.
Foreign National Program
You can probably figure out what this is about based on the header. And yes, even for those who are living abroad and being paid in a foreign currency we have lending options. The process is similar but the documentation varies from country to country. Ultimately, we still need to verify one’s income, assets, credit, debts, etc. We work closely with the business or financial advisors of the clients and hold their hand from start to finish to ensure we can get them to the closing. Often times, a larger down-payment is required (i.e., 35% down) and there are few loan programs available, but the options are more favorable than what one can get from their own country. Our clients, Stacey and Steven, hail from Canada and couldn’t be happier about this program it’s allowing them to purchase a condo in NYC which they’ve always wanted.
Want to buy a new home before selling your current home but can’t qualify for the new home until you sell your current home? (Wow that was a mouthful)
Yeah, we can help with this too (program)
Most advisors in these situations will tell someone to apply for a bridge loan. It seems to be the default answer these days. But bridge loans can be super pricey, they’re not easy to find, they can be difficult to qualify for, and they should be looked at as a last resort.
I’m working with Daphne right now who is 71 years old, lives in a coop, and is interested in purchasing a brand-new coop. She eventually wants to sell her current home but only wants to do that after she closes on the purchase of the new place. The problem is, she doesn’t qualify holding two mortgage payments and two sets of coop maintenance bills with her income. So what can we do? Since she is of retirement age, and has a significant amount of money in her IRA account, we can simply request from her financial advisor that she increase her IRA distributions which we can use as income. As long as we receive two consecutive months of distributions, and there’s enough money in the IRA to last for at least three years after the distributions, this income can be used for her to qualify. This is a great way to help someone avoid going the route of a bridge loan.
As I’ve said many times before – you don’t know what you don’t know. If you have a scenario that is a bit out of the box or if another lender declined you for a loan, let’s have a chat. We can’t make any promises, but we can promise that we’ve saved countless deals for clients and have provided many loans to clients who didn’t think they could ever get one. So give us a call.
Vice President of Lending
CrossCountry Mortgage, LLC
Personal NMLS385124 Branch NMLS1601092