100% LTV Purchase, Self-Employed, Strong Assets
OPPORTUNITY: In this particular transaction, the borrower wanted 100% leverage (LTV) to preserve her “non liquid” assets and not have to sell these assets for her down payment. Like all loans, it’s all about positioning the loan package and how you demonstrate to the lender that this borrower has the financial wherewithal to carry and support this loan for the long term.
The borrower was a self employed massage therapist, who had recently moved to the Bay Area, but still maintained her rental properties in Sacramento for her retirement.
SOLUTION: By taking out a HELOC on a single family residence in Sacramento, we were able to achieve the post closing reserve requirements for the purchase of her new house in the Bay Area. Knowing that “trapped” equity would not fulfill our 9 mo’s of PITI reserve requirements, we put a low leverage HELOC (6.75%) on the property and deposited the proceeds into her savings accounts to accommodate the lender.
After covering the lending market, I was able to identify a niche lender who provided us 7/1 Interest Only for 6.25%, plus a 2nd loan at 8.75% for a total loan amount of $585,000.
Great loan for this borrower.
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