Hello. This is the inaugural broadcast of the Black and Brown Folks show, a series dedicated to warning Black and Brown peoples in the United States of upcoming economic upheaval in the economy and discussing ways to avoid slipping further behind in the wealth gap. Today’s quote is from the Book of Revelation chapter 21 verse four. And the word of God reads, “the old order of things has passed away.”
Black and Brown Folk is one man amplifying the voices of those who see economic upheaval in the years ahead, prophetic voices, economic experts, and I believe the voice of God himself cautioning his own to prepare for this new economic order. Each show, I’ll try to weave the history of our struggle in this country into the fabric of what our shared economy is morphing into.
How do we position ourselves as minorities traditionally marginalized and sacrificed by the economic powers that be? Real questions, real answers such as if the dollar or the fiat money system is dying, where do we go for refuge? What assets make sense historically? What is God saying? I will always keep that in the forefront and invite conversation lest we forget the main conundrum of this life. Where were we before we came into our mother’s wombs, and where do we go after death? Where to put our money is just an exploration of how comfortable we’ll be in this titanic life journey.
Okay, I’m a mortgage expert. It’s pretty safe to say that. I’ve taken the time to earn an MBA in real estate development and invested over 30 years as a Mortgage Loan Officer. My specialty has been renovation financing, and that’s what I want to share with you today. One thing I’m going to share today is how to get a mortgage if you’ve recently lost your job. Are there mortgages you can get when you don’t have ⁓ a job or steady income? Yes, the answer is yes. There’s a mortgage you can get if you just lost your job, but you have a 401k, and I’ll put some information on that in the dropdown. But right now, let’s talk about the DSCR mortgage.
Let’s first talk about mortgage basics. Basically, the way you qualify for a mortgage is your gross monthly income times whatever the qualifying ratio is. Let’s say it’s 41 % for a V.A. loan. So you take 41 % of your gross monthly income, and that’s the maximum mortgage payment, principal, interest, taxes, and insurance you can have. That’s the basics of qualifying somebody for a mortgage.
Each show, I’ll pass on my expertise in the form of a specific financing technique to help Black and Brown folk acquire real estate, one of the assets crucial to thriving in this new economic world order. This page is just to show how much I’m not going to bog you down with. These are the underwriting guidelines for Fannie Mae, Freddie Mac, and FHA, over 5000 pages I’ve read so you don’t have to.
Let’s talk about mortgage. Real estate investors from developers to mom and pop flippers use this debt service coverage ratio. Why start here? Well, this one allows us to throw out the majority of the thousands of pages of underwriting guidelines I just showed you. The property itself qualifies. So basically, if you’re using the regular underwriting guidelines, the underwriter or the lender is going to determine your risk. It’s all based on risk. Well, how much of a risk are you that you will not perform, that you will not pay this mortgage? They look at your FICO score. They look at how you utilize the debt that you have, your credit cards. Do you max them out? Are you late paying? And then, they look at your reserve capacity. How many months of savings do you have if you get in financial trouble? How much have you been able to save.
Normally, your credit history and ability to back the loan are key factors in approving or denying your mortgage application. With a DSCR mortgage, you can buy investment property, one to eight units, and the from the property is the primary consideration. So, if with a debt service coverage ratio mortgage, the property qualifies, not you, that’s why you could — We don’t even take your income and where you work; that’s not even on the loan application as it normally would be on the 1003, the loan application. The property income is divided by the property debt obligation. So, if the money the property is bringing in is 1.2 times or more, 1.1 time or more, it can even be a little lower than that, but ideally, 1.2 times what the monthly payment is, the principal interest, taxes and insurance, whatever, HOA, whatever you have on that property. Income over debt, 1.2 plus, property qualifies.
As long as the net income is 1.2 times the monthly debt obligation, the property qualifies. Your mortgage application doesn’t even include workplace and income verification. Credit score matters, as does investor experience, but the property qualifies. So for a DSCR mortgage, let’s say you had rent after expenses of $2,160, and your monthly payment on the debt, principal interest taxes and insurance was $1,800. 1.2, property qualifies. You do not even have to be working a regular job.
So, that’s the first episode of the Black and Brown Folk Show. I wanted to show you if you should be, find yourself furloughed, laid off without a job, you can still start collecting assets. If you have a 401k, you can…use that. There’s a program we have that you can use that to qualify for a mortgage, even if you don’t have income at the current time. It’s all about knowing somebody in this particular field. That’s how we’re going to get by, networking, knowing each other in our particular fields of human endeavor. Kenneth Bussard, Black and Brown Folk. Thank you.
