Here’s a little secret: All mortgage lenders—from the medium-sized folks like Box Home Loans to the “big boys” like Wells Fargo and Bank of America—ultimately sell the majority of their loans to an end-investor. For example, Bank of America may take your payments but they have most likely sold your loan to an investor like Fannie Mae. In order to understand how Box Platinum Pricing works, you must understand this fundamental truth about mortgage lending: end-investors—those who buy mortgages—set the market price for mortgage loans, and the higher quality of loan, the more an end-investor will pay to buy that loan.
Such is the case with our Platinum Pricing. We’ve recently entered into a partnership with a small group of investors who will pay us more for nearly perfect loans, and we’re passing that savings on to those who qualify in the form of Box Platinum Pricing. Fortunately, more than 74% of our clients qualify for Platinum Pricing!
So, what are “nearly perfect loans”? If our Today’s Rates page indicated that you may qualify for Platinum Pricing then your odds of qualifying for that discount are extremely high. Most loans that do not qualify for Platinum Pricing are weeded out at the time the loan is priced. That said, there are certain characteristics about your loan application, the property, and your financial documentation that our website simply cannot know at this point in the process. Those unknowns could possibly disqualify you.
Below is a sample list of reasons why some people may not qualify for Platinum Pricing. The list below is fairly comprehensive but should NOT be considered as the exhaustive list of disqualifiers for Platinum Pricing. Review it briefly, but to be more certain ask one of our expert loan officers to carefully review your loan application or scenario. Our loan officers can make a preliminary determination about your ability to qualify for Platinum Pricing.
Please note that should you choose to proceed with Platinum Pricing and do not end up qualifying, you will be subject to worse case pricing.
- All property appraisals must be reviewed and deemed acceptable by the end-investor to receive Platinum Pricing. Most properties pass the review without issue. But occasionally some homes with rural, new construction, and/or unique characteristics are rejected due to insufficient recent and proximate comparable properties.
- Max acreage is 10 for a property (frankly, standard guidelines rarely allow acreage to exceed 10 but they may in certain circumstances, such as: (1) if the acreage is typical for the area, (2) there are comparable sales nearby with such acreage, and the (3) property is not used for agricultural or farming uses). However, Platinum Pricing strictly and arbitrarily caps the acreage at 10.
- All previous improvements to the property must have had a permit issued, if required. In other words, if you recently added a wing to your home but you were too cheap to get a permit from the city (assuming a permit was required for such work), the property is not eligible for Platinum Pricing. This can be an issue as well with our standard guidelines. Consult your loan officer on the nature of your unpermitted improvements, if applicable.
- Condos have limited financing available: 80% loan-to-value (LTV) on Primary Residences, 75% LTV on Vacation Homes, and Platinum Pricing does not allow condos on Investment Property loans.
- Only borrowers can take title to a home; the only exception is a spouse. So, if for some reason, your buddy is on the title of your home, he can’t remain on the title of the home if he isn’t obligated on the loan.
- Minimum loan amount is $50,000 if less than that amount will not qualify for platinum pricing.
- No Home Affordable Refinance (HARP) Loans.
- Non-Permanent Resident Aliens are eligible for 1-unit, Primary Residence Purchase and no cash-out refinance transactions with a maximum LTV of 90%. Such borrowers must evidence a minimum 2 year history of residency, employment, and established credit within the U.S.
Restrictions on Loans that Exceed 80% (LTV)
- Minimum FICO: 680
- No secondary or subordinate financing allowed if your LTV exceeds 80%. For example, if your first mortgage is $81,000 and your home is worth $100,000, you cannot subordinate a second mortgage.
- No Condos above 80% LTV.
Restrictions on Debt to Income Ratio
- Debt-to-Income (DTI) Ratio cannot exceed 43% (standard guidelines allow a 45% debt ratio).
- If your spouse is not on the loan but you file your tax return jointly, and your spouse loses money from a business, then that loss will count against your DTI.
Restrictions on Income and Income Documentation
- You must have been on the job for at least 30 days and provide pay stubs showing 30 days worth of earnings (frankly, standard guidelines require the same thing, but we do have the ability with certain investors to accept an employment contract in lieu of pay stubs on a case by case basis. However, with Platinum Pricing, employment contracts by themselves are never sufficient).
- You cannot count any rental income on a property that you have occupied in the last year.
- You must have monthly residual income of at least $800 on a primary residence loan and $2,500 on an investment or vacation property loan. Monthly residual income refers to the amount of money that is left over after you have paid your mortgage payment and all other monthly debt payments. For example, if your gross income is $5,000 per month, and your monthly debt payments includes a mortgage payment of $1,500 and a car loan of $500 for a total $2,000 in monthly debt payments, then you have $3,000 in residual monthly income. Very few people borrowing for a mortgage struggle to meet this guideline.
- Non-permanent resident aliens will need to provide the last two years of Federal Tax Returns, and those tax returns must be validated by the IRS with an acceptable transcript.
Restrictions on Credit History
- You must have at least two credit scores, which means that your credit history is sufficiently deep that two out of three major credit bureaus can rate you. As a general rule, if you’ve had at least three continuous years of credit history with the credit bureaus then you will have sufficient credit to qualify for Platinum Pricing.
- You cannot have had made mortgage payments more than 30 days late in the last 12 months.
- 680 Credit Score required when your loan-to-value (LTV) exceeds 80%
Restrictions on Purchase Loans
- The seller of the property must have owned the property for at least six months on the day the purchase contract was executed by all parties: in other words, no “flip” transactions (standard guidelines don’t put an arbitrary limit on the ownership history of the property; however, transactions where the seller has been on title less than six months are highly scrutinized even with standard guidelines and are subject to additional appraisal requirements).
- You cannot purchase a Primary Residence if you have refinanced or purchased another Primary Residence in the last twelve months. Exception granted if current home will be sold on or before the closing of new home. Other exceptions do apply: consult your loan officer.
Restrictions on Refinance Loans
- If your property has been listed for sale in the last six months, then you cannot do a cash-out refinance (standard guidelines allow cash-out loans in such situations but limit the loan to a 70% LTV).
- Cash-out loans may not exceed 80% LTV (standard guidelines are 85% LTV in most states)
- You cannot refinance a property unless you have owned it for at least 120 days. The loan application date must be on or after the 120th day.
- You cannot refinance a property and subordinate a second mortgage that is held by a municipality.
- If you have to bring in any money on a refinance transaction, it must come from your own sources, and cannot be a gift.
- Equity payouts required to satisfy legal action such as a divorce or inheritance must conform to cash-out guidelines and cannot exceed 80% LTV. (Standard guidelines may allow an exception up to 95% LTV and classify as a no cash-out transaction.)
Restrictions on Second Homes and Rental Properties
- On second homes, no gift funds are allowed for down payment or closing costs.
- If you are buying or refinancing an investment property, you cannot use the property’s rental income to qualify unless you have a two year history of being a landlord. Standard guidelines require just a one year landlord history (as verified by a tax return).
- No condos on Investment Property loans.
- You can have no more than 4 financed properties at the end of this transaction (standard guidelines allow up to 10 total financed properties).