We’ve seen an uptick lately from our conventional mortgage peers whose borrowers are in jeopardy of not getting a loan when the combination of the borrower’s FICO and DTI kills their 1st and 2nd combo. Last week, we funded one such scenario.

The scenario unfolded as follows:

  • 1st mortgage – at the high balance limit for the county
  • Credit scores were below 720
  • DTI was above 40% needed for the 2nd mortgage and below 45% needed for the first mortgage, even with our 2nd

We were able to fill that gap and this can work for owner AND non-owner.

  • LTV  – CLTV needs to be 70% or less.

These scenarios are not uncommon and many lenders can still close the loan for their borrower with a private 2nd. And, once the borrower’s DTI and/or FICO improves the borrower can refinance out of our 2nd with a conventional loan.

Give us a call- 415.883.2150

Author: Nam Phan

CA. DRE # 01310091

Nam is Chief Operating Officer of Pacific Private Money, Inc. He first joined Pacific Private Money in 2015 as Business Development Director before becoming General Manager then COO, his current position.