Since hitting historic lows in 2021, mortgage rates have risen sharply. That reality is squeezing borrowers – and it’s putting pressure on loan officers to find creative ways to help their clients.
LendSure understands this challenge. That’s why we’re partnering with loan officers to find common sense solutions to borrowers’ unique needs. Loan structuring is a mindset of crafting loan packages that are tailored to your clients’ specific challenges.
Perhaps the borrower is concerned with having the lowest monthly payment or lower interest rate. Perhaps they are only concerned with cash flow from their investment properties – rents flowing in and mortgage payments going out. Loan structuring empowers you to provide the financing solutions to meet their unique needs.
Loan-Structuring Category 1: Rate-sensitive borrowers
It’s no secret that mortgage rates have jumped. To help alleviate the sticker shock of today’s higher rates, LendSure gives borrowers the option of buying down the rate – with the added benefit of no additional cash at closing.
Known as Rate Cutter, this program lets borrowers pay points to reduce the rate on the loan. LendSure lets your client finance points into the loan, so the borrower need not produce extra cash at the closing table. The increased loan size created by financing points will not push the loan into a higher pricing bucket based on loan-to-value ratios.
Rate Cutter carries some minor limitations. For instance, we allow a maximum of 2% additional LTV up to 85% to be used for broker compensation and/or rate buy-downs.
Despite those minor caveats, this is a very flexible program that lets borrowers enjoy tremendous savings. Rate Cutter means a lower interest rate, a lower payment and a lower total cost of the loan, with less interest paid over the life of the mortgage.
Loan-Structuring Category 2: Monthly payment-sensitive borrowers
Of course, rising mortgage rates are a pain for borrowers because they translate to higher monthly payments. If you have a client who’s struggling to make the numbers work with a 30-year amortization schedule, LendSure offers interest-only payment options.
LendSure’s 10/40 Fixed Interest-Only (IO) program provides your clients with unparalleled flexibility. They can choose to make an interest-only payment or a fully amortized payment, without penalty. After the initial Interest-Only period, the loan converts to a fixed rate loan for the remaining 30 years. A 55% DTI on the 30 year amortized payment will also be considered to help more borrowers.
Loan-Structuring Category 3: Property Investor Cash Flow
LendSure’s Debt-Service Coverage Ratio (DSCR) program helps property investors maximize their monthly cash flow by underwriting the loan based on the property’s cash flow, with no additional income needed to qualify.
Is your property investor client missing the qualification mark? Improve the picture by using Rate Cutter to reduce loan rate and help the borrower qualify for the loan.
Maximize the Cash Flow Even Further
You can maximize the benefits of these strategies by structuring a loan package that combines DSCR Investor Cash Flow with Rate Buy Down and the 10/40 Fixed IO program to maximize the monthly cash flow for rental properties.
Putting these strategies into action can be tricky, but your LendSure Account Executive can structure these deals for you and even help present the solutions to your borrowers.
At LendSure, we know it’s a challenging time for borrowers and for loan officers. Contact one of our experienced account executives to learn more about loan structuring, and how these strategies can help you say yes to deals.