- Lowest Rate
- Cash Out
- Low Down Payment
- Gift Funds for down payment and or closing costs
- Renovation Loan – FHA 203K, Fannie Mae or Freddie Mac Rehab Mortgage
- Non QM Lending (Qualified Mortgage) – These are portfolio underwritten loans with very flexible guidelines and higher interest rates
- 100% home loan financing
- Stated Income underwriting
- No – Doc loans
- USDA rural development lending
These are the Top Home Lending Niches
Requested by Borrowers, Brokers and Real Estate agents.
Most borrowers with excellent credit are shopping for the lowest mortgage rate. In many cases this in the only thing they are looking at.
Even if they are paying extra in the closing costs.
Cash out. Can I get an equity out refinance please?
When home prices rise and rates are fairly low the flood banks burst open.
I know of some Tampa Mortgage Brokers who only open up for business during the refinance booms.
They actually shut down operations when the refi’s dry up.
We used to call the guys the “bowlers” I guess the were on a bowling team or something.
I could go on and on about about these refi’s if you want to read more try here.
Let’s move on now.
Low Down Mortgages
Now this is a niche I can truly stand behind and support.
So many families are trapped in rentals because their budgets or financial training don’t allow them to save for a house.
There are some work arounds that can be had now without having to save for years.
For more in-depth information – read here.
Many folks don’t even know how much you need to save for a house.
What the difference in mortgage payments will be with 20% down vs 3%. Learn more with Niche Broker LLC.
Gift Funds Allowed?
People are shocked to learn your down payment cannot just fall out of the sky.
It has to be seasoned for 2 months. What the heck is seasoning of closing costs and down payments?
This seasoning thing is probably the number one deal killer in the low down purchase market.
Number two used to be a buyer racking up their credit cards or buying a new car during the loan approval process or just before closing.
I should ad a survey for RE Agents and Mortgage Brokers here for this one. Could get some funny stories on this subject.
OK back on track the minimum percentage down has to come from the your accounts and you have to prove it has not been deposited within the last two months from a disqualifying source.
All funds for reserves, closing and down payments are traced back to the source if the deposits show up in the underwriting package paperwork you submit you your lender.
Now that we have explained that part let’s get to the main question.
Are gift funds allowed? Yes most mortgage programs allow gift funds over and above the minimum borrower funds.
Learn all about gift funds and the like here.
Purchase Renovation or House Rehab Loans
are like an elusive animal that you always hear about but you have never seen one.
In my 20 something years in this business I’ve only closed a few of these.
I think I have done more Construction to Permanent lending than Conventional or FHA purchase and repair loans.
Now I do see them advertised especially by wholesale lenders to mortgage brokers.
Wholesale lenders love advertising their niches, especially when their rates are not so great.
Why do so many hunt yet so few brokers and lenders close these rare mortgage animals?
NON – QM Lending or Non Qualified Mortgages
What is a non QM? Everybody says it’s not Subprime, right.
I say Non-QM is subprime on Prozac. It’s subprime less crazy and all prettied up for regulators and investors.
I like the original description for portfolio lending better, however since the word Subprime instantly triggers terror and thoughts of sudden economic crashes in the minds of the many.
We’ll stick with the new favorite Non-QM Mortgage to describe these higher priced mortgages.
When the loan rate and underwriting features fall above a certain threshold you have a NON-Qualified Mortgage.
This is my favorite segment of the lending profession. You get to help people others can’t and turn away.
In the old days this is what made you a Mortgage Broker, B – C lending is why brokers used to exist.
Private Lending or Hard Money is another favorite that did not quite make the top 10 list. However these are not QM.
In fact most private lenders will not make loans to homeowners in great fear of Section 32 High Cost Mortgages, HOPEA and a slew of regulations that every attorney known to humankind advises hard money lenders only to lend to investors and businesses, Never to a person who will live in the home.
This fear is unproven you can make private mortgages to homeowners. Home owners in Tampa Bay can find one who will lend to them here. Hint Hint..
Let’s sum it up with some other similar lending terms that better define what Non-QM actually is.
- Outside the Box underwriting programs
- Niche Jumbo loan
- Alt A Lending
- Alternate income qualifying
- Low Doc
- Limited Doc
- Portfolio loan program
Ok so I think you get the idea. QM is Fannie, Freddie and Government Lending. NON-QM is everything else under the sun except Hard Money.
Hard Money is in the High Cost Lending category or tier.
100% loan to value
Ok this niche is easy I promise. Outside of VA and USDA I don’t think 100% LTV is really a thing anymore.
Even if it was there is a much more efficient and cheaper way to finance 100% of your home’s purchase price or value.
Peer to peer personal loans are the far superior way to achieve the desired result.
Learn how to ethically and properly use P2P lending for a down payment on a house. Here you go.