Refinancing with no W-2 income

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Daniel ChristopherBusiness Member
Lender · Miami, FL · Member since 2020 · 793 posts · 96 votes
3y
Quote from @Anthony Freeman:

What are some solutions that you have found?

As Brayden mentioned, would be tough to refinance if this is a primary home. If it's an investment property DSCR would be the go to route here.

If it's an investment property do you operate it as a Long Term Rental or Short Term Rental?

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  • John MorganPro Member
    Rental Property Investor · Grand Prairie, TX · Member since 2018 · 2k+ posts · 2k+ votes
    3y
    Quote from @Anthony Freeman:
    Quote from @John Morgan:

    Go with DSCR lenders. They don't care if you have a W2. If you have a pulse and it cash flows, they'll give you a cash out refi or a new loan. lol

    What rates have you seen on these loans?
    I just got a quote for 7.5% for a 30 year with 3 year prepayment penalty with 1pt. 70% LTV
    1Reply
  • Carlos Ptriawan
    Member since 2019 · 7k+ posts · 4k+ votes
    3y

    There's also equity company like prosper,etc that's willing to give you money but they would buy appreciation and there's baloon payment in 10-15 years or so.

    0Reply
  • Irina Belkofer
    Real Estate Broker · Cleveland, OH · Member since 2017 · 719 posts · 658 votes
    3y

    @Carlos Ptriawan how they are wording “buying appreciation”? LP? Other form of partners?

    That’s fishy 

    0Reply
  • Carlos Ptriawan
    Member since 2019 · 7k+ posts · 4k+ votes
    3y

    not fishy, it's common business model now LOL.
    Btw there's caveat, these program only apply to primary not rental.

    Basically you are sharing the appreciation with the lender within a time period.

    They're primarily targeting an elder man house that needs money. 
    All in All, I've calculated in the past, it was like one is borrowing 15% rate from the bank.

    0Reply
  • Irina Belkofer
    Real Estate Broker · Cleveland, OH · Member since 2017 · 719 posts · 658 votes
    3y

    And how it’s not fishy?

    They stripe off elderly of their equity, their rates are borderline criminal - and on the primary residence?!?

    The better have a license on that market because I can’t do even land contract on the primary residence without lending license.

    I bet they will get some time in jail if some relatives of such older owner will sue them...
    so, I stand corrected - it’s not fishy, it’s criminal.

    0Reply
  • Austin Steed
    Real Estate Agent · Columbus, OH · Member since 2016 · 593 posts · 664 votes
    3y
    Quote from @Anthony Freeman:

    What are some solutions that you have found?


     If you have a strong PFS I would consider using local community banks for commercial loans. This takes a ton of the nitty-gritty fanny freddy guidelines out of the equation. 

    2Reply
  • Dave Skow
    Lender · Seattle, WA · Member since 2014 · 2k+ posts · 899 votes
    3y

    @Anthony Freeman- thanks ..if property is a rental - try a DSCR loan ....or some lenders will allow use of the schd E rental income to be used to help offset the mtg payment on the home ....if you have other income - lenders may be able to use this ....consider getting a co borrower if needed

    0Reply
  • Anthony Freeman
    OP
    Member since 2023 · 327 posts · 63 votes
    3y
    Quote from @John Morgan:
    Quote from @Anthony Freeman:
    Quote from @John Morgan:

    Go with DSCR lenders. They don't care if you have a W2. If you have a pulse and it cash flows, they'll give you a cash out refi or a new loan. lol

    What rates have you seen on these loans?
    I just got a quote for 7.5% for a 30 year with 3 year prepayment penalty with 1pt. 70% LTV

     Ok so there are effective solutions

    0Reply
  • Anthony Freeman
    OP
    Member since 2023 · 327 posts · 63 votes
    3y
    Quote from @Dave Skow:

    @Anthony Freeman- thanks ..if property is a rental - try a DSCR loan ....or some lenders will allow use of the schd E rental income to be used to help offset the mtg payment on the home ....if you have other income - lenders may be able to use this ....consider getting a co borrower if needed


     Sounds effective thank you

    0Reply
  • Anthony Freeman
    OP
    Member since 2023 · 327 posts · 63 votes
    3y
    Quote from @Irina Belkofer:

    And how it’s not fishy?

    They stripe off elderly of their equity, their rates are borderline criminal - and on the primary residence?!?

    The better have a license on that market because I can’t do even land contract on the primary residence without lending license.

    I bet they will get some time in jail if some relatives of such older owner will sue them...
    so, I stand corrected - it’s not fishy, it’s criminal.


     What exactly are you referring to? What happened?

    0Reply
  • Anthony Freeman
    OP
    Member since 2023 · 327 posts · 63 votes
    3y
    Quote from @Carlos Ptriawan:

    There's also equity company like prosper,etc that's willing to give you money but they would buy appreciation and there's baloon payment in 10-15 years or so.


     Buy appreciation how so?

    0Reply
  • Timothy Hero
    Lender · United States · Member since 2020 · 1k+ posts · 499 votes
    3y
    Quote from @Anthony Freeman:
    Quote from @Michael Dumler:

    @Anthony Freeman, asset-based mortgage products such as a DSCR loan (debt service coverage ratio). DSCR rates and terms will be less favorable than conventional, but if that's the only way to pull your capital back out of the deal, then I would explore that option.


    So you're saying there are mortgages that are solely based on my NOI to Debt Service ratio?


    Correct. Aside from the cash flow of the property, your credit is another factor considered for approval. But no income, dti, employment, etc.
    1Reply
  • Anthony Freeman
    OP
    Member since 2023 · 327 posts · 63 votes
    3y
    Quote from @Timothy Hero:
    Quote from @Anthony Freeman:
    Quote from @Michael Dumler:

    @Anthony Freeman, asset-based mortgage products such as a DSCR loan (debt service coverage ratio). DSCR rates and terms will be less favorable than conventional, but if that's the only way to pull your capital back out of the deal, then I would explore that option.


    So you're saying there are mortgages that are solely based on my NOI to Debt Service ratio?


    Correct. Aside from the cash flow of the property, your credit is another factor considered for approval. But no income, dti, employment, etc.

     Thanks just learning all I can.

    0Reply
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