– Eliminates verification of income
– Shorter processing time
This product is targeted to SELF-EMPLOYED BORROWERS ONLY. The definition of a self-employed borrower is someone who receives 50% of his or her income from commission. Certain restrictions apply to this product. For a primary residence or second home, a minimum of a 720 credit score is required with a 10% down payment. For investment properties, a minimum of 20% down is required with the same 720 credit score requirement.
The immediate downside is that the risk is much higher for the Bank versus a full-documentation loan. The rate goes up with the risk; therefore the rate will be higher. The upside is that we have negotiated a 3% closing cost credit for our clients who close at the new earlier closing date. Buyers can use that 3% for closing costs, origination fees, discount points, etc… My suggestion is for self employed buyers to buy the rate down a couple of points with the money that the developer is giving them to end up with a conventional interest rate. EITHER WAY IT GOES, YOU WIN…
This is a huge opportunity to act quickly on this offer that the developer is offering. If you have any questions or concerns, please don’t hesitate to give me a call.
Travis Smith, USMC
Mortgage Loan Consultant
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