All Forum Posts by: Neela David

I'm working with one of the lenders I used to work with. He processed this loan as a Conventional but this needs to be on a DSCR loan. Does anyone expense this with United Wholesale Mortgage? And does this closing cost make sense as well? He is running my soft credit for the loan guarantee and it will be on LLC. Does this seem right?

Clayton was spot on with his assessment. It is hard to help evaluate the closing costs without that page that lists the costs. Unless something has changed with UWM, their loans likely still report to personal credit, even if vested in an entity. This is common for many traditional or non-qm outlets from my experience and is a good thing to check with your broker.

Cheers!

I'll second this, the second page of the loan estimate is frankly the most important. A lot of people think they are getting a good deal based on the rate, but if you are paying exorbitant fees or points, you may not be. Curious if there is a PPP on this (PPP is illegal in some states).

here is the second page.

0 Votes

Cleveland, Ohio

Quote from @Clayton Silva:

Yes it does. There is no box in Loan Estimates for NonQM loans (DSCR is a Non Qualified Mortgage...meaning it does not get sold to Fannie or Freddie). As such, most DSCR loan estimates go out as "conventional" in the box you highlighted. Nothing out of the ordinary there.

Couple notes in case your lender did not explain it:

1) The owners of the LLC are still personally guaranteeing the loan contrary to popular belief. Despite the LLC technically being the note holder, there is still a personal guarantee.

2) DSCR loans CAN report to credit. While they may not initially, these loans get packaged up and sold to different hedge funds, servicers, insurance companies etc. When they do get sold/transferred, the new servicer may not fully read through the agreement and may report the loan to your personal credit.

3) Regardless of whether it reports to credit or not, it technically will impact DTI once reported on Schedule E for tax returns. Might be able to make the case that if it is not on credit and title is in LLC name you can omit it from DTI calc, but that is going to come down to specific lender guidelines and underwriter a lot of the time in regards to how they interpret that.

Hope this helps!

Thank you, sir, This makes more sense for now.

0 Votes

Cleveland, Ohio

0 Votes

Cleveland, Ohio

All Forum Posts by: Neela David

Neela David has started 1 posts and replied 3 times.

Post: Does this closesing cost make sense? What should I expect?

Post: Does this closesing cost make sense? What should I expect?

Post: Does this closesing cost make sense? What should I expect?