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Category: Blog

Arizona Asset-Backed Loans

As the winds of financial change continue to blow, Arizonians seek flexible solutions to secure their economic stability. Enter asset-backed loans – the key to unlocking opportunities, and overcoming monetary hurdles. In the Grand Canyon State, the power of asset-backed loans is unparalleled, providing individuals, and businesses with the leverage needed to navigate uncertain terrain and grasp growth opportunities.

Whether it’s leveraging real estate holdings, or utilizing valuable assets, the flexibility offered by Arizona asset-backed loans empowers borrowers to attain the financial freedom they desire. This article delves into the intricacies of asset-backed loans, shedding light on how they can serve as a reliable financial instrument in today’s dynamic landscape. From understanding the eligibility criteria to exploring the diverse array of assets that can be utilized, we guide you through the multifaceted world of asset-backed loans.

Join us on this journey as we unravel the compelling power of these loans and how they can empower you to achieve your financial aspirations in the thriving landscape of Arizona.

What Are They?

They are a form of financing where the borrower use assets as collateral to secure a loan. These assets range from real estate properties to jewelry or fine art. Unlike traditional loans, which are often dependent on credit history and income, asset-backed loans rely on the value of the pledged assets to determine the loan amount and terms. This provides an alternative borrowing option for individuals who may need to meet the stringent criteria of conventional lending institutions. Asset-backed loans are desirable for borrowers looking to unlock the value of their assets without having to liquidate them.

Asset-backed loans offer several distinct advantages over traditional forms of financing:

  1. They allow individuals with valuable assets but limited income or credit history to access capital.
  2. Utilizing a diverse range of assets as collateral expands the accessibility of asset-backed loans to a broader demographic, offering a pathway to financial empowerment for many individuals and businesses in Arizona.


One of the defining features of asset-backed loans is the versatility of assets that can be used as collateral. Real estate properties, including residential homes and commercial buildings, are among these loans’ most commonly pledged assets. Additionally, valuable personal assets such as luxury vehicles, fine jewelry, art collections, and investment portfolios can serve as collateral. The broad spectrum of eligible assets allows borrowers to leverage their entire asset portfolio to secure financing, providing flexibility not typically afforded by traditional lending avenues.

Types of Assets Used as Collateral

Obtaining an asset-backed loan involves several key steps, beginning with the valuation of the assets being pledged as collateral. Lenders typically conduct thorough assessments to determine the value and marketability of the assets, ensuring that they can serve as viable security for the loan. Once the asset valuation is completed, the borrower and lender negotiate the loan terms, including the loan amount, interest rate, and repayment schedule. Following mutual agreement, the assets are formally pledged as collateral, and the loan proceeds are disbursed to the borrower. Throughout this process, transparency and communication between the borrower and lender are essential to ensure a smooth and efficient transaction.

The Process of Obtaining an Asset-Backed Loan

While asset-backed loans offer numerous benefits, it is crucial for borrowers to carefully evaluate the associated risks. One primary risk is the potential loss of assets in the event of default on the loan. Borrowers must assess their ability to meet the repayment obligations to avoid the risk of asset forfeiture. Additionally, fluctuating market values of certain assets, such as real estate or investment portfolios, can impact the loan-to-value ratio and the overall risk exposure for both the borrower and lender. Understanding risks and implementing risk mitigation strategies is paramount for borrowers considering asset-backed loans as a financing option.

Evaluating The Risks

The inherent flexibility of asset-backed loans lies in their ability to unlock the latent value of assets and convert them into usable capital. This advantageous for individuals and businesses who fund entrepreneurial ventures, real estate developments, or personal financial needs without disrupting their asset holdings. Moreover, asset-backed loans can offer a pathway to overcome temporary financial challenges or capitalize on time-sensitive opportunities, providing a level of agility and responsiveness that is essential in today’s dynamic economic environment.

How Can Asset-Backed Loans Provide Financial Flexibility?

Selecting the right lender is a critical aspect of securing an asset-backed loan. Borrowers should seek out reputable private lending institutions with a proven track record in asset-based financing. It is essential to consider factors such as the lender’s experience, valuation process transparency, loan structuring flexibility, and responsiveness to borrower needs. Additionally, understanding the lender’s terms and conditions, including any potential fees or penalties, is crucial for making an informed borrowing decision. By exercising due diligence in selecting a lender, borrowers can ensure a positive borrowing experience and a mutually beneficial lending relationship.

Choosing The Right Lender 

To illustrate the practical application of asset-backed loans, consider the case of a small business owner in Arizona who utilized their commercial property as collateral to secure an asset-backed loan. With the injected capital, the business could expand its operations, invest in new equipment, and increase its market presence, ultimately leading to significant revenue growth. Similarly, an individual borrower leveraged their investment portfolio to obtain an asset-backed loan, allowing them to seize a lucrative investment opportunity and realize substantial returns. These case studies exemplify the transformative impact that asset-backed loans can have on achieving financial goals and propelling economic growth.

Case Studies 

As with any financing, asset-backed loans are subject to legal and regulatory frameworks that govern their implementation. Borrowers and lenders must adhere to applicable laws and regulations. It is crucial to engage legal counsel to review loan agreements, assess the enforceability of collateral arrangements, and navigate any regulatory requirements specific to asset-backed lending in Arizona. By proactively addressing legal considerations, borrowers and lenders can establish a secure foundation for asset-backed loan transactions and safeguard their respective interests.

Legal and Regulatory Considerations 

In conclusion, asset-backed loans have emerged as a potent tool for unlocking financial flexibility in Arizona. leveraging diverse range of assets as collateral and the potential for favorable borrowing terms position asset-backed loans as a compelling financing option for individuals and businesses alike. By understanding the nuances of asset-backed loans, evaluating the associated risks, and selecting reputable lending partners, borrowers can harness the power of asset-backed loans to realize their financial aspirations and navigate the ever-changing terrain of the Arizona economy with confidence and resilience.

By delving into the multifaceted world of asset-backed loans, we have uncovered the transformative potential of these financial instruments in empowering borrowers to achieve greater financial flexibility and seize opportunities for prosperity. As the demand for flexible financing solutions continues to rise, asset-backed loans stand out as a resilient and adaptable pathway to financial empowerment in the vibrant landscape of Arizona.

Conclusion: The Potential Impact  on Financial Flexibility

Asset-backed loans, also known as collateralized loans, are a form of borrowing that involves using assets as collateral to secure a loan. In Arizona, these loans offer a unique opportunity for individuals and businesses to leverage their assets to access much-needed capital. This can be particularly advantageous for those needing to meet the stringent requirements of traditional unsecured loans.

The eligibility criteria for asset-backed loans in Arizona typically revolve around the value and type of assets utilized as collateral. Lenders assess the market value and liquidity of the assets to determine the loan-to-value ratio and the overall risk associated with the loan. This approach provides a level of flexibility for borrowers, as it allows them to unlock the value of their assets without being solely dependent on their creditworthiness.

Asset-backed loans in Arizona can be secured by real estate, investment portfolios, valuable personal property, and future cash flows from contracts or receivables. This diverse array of collateral options allows borrowers to choose assets that best align with their financial objectives and risk tolerance. As a result, asset-backed loans can be tailored to meet the specific needs of borrowers, whether they are seeking short-term liquidity or long-term investment capital.


Disclaimer: This blog is for informational purposes only, as Blake Mortgage does not originate this type of loan. Please seek out specialty lenders who do originate such loans.


Blake Mortgage only originates loans secured by real property.

Asset Depletion Loans: A Comprehensive Guide


Asset depletion loans, also known as asset-based loans or asset dissolution loans, offer a unique borrowing solution for individuals who may not have a traditional income but possess substantial assets. These loans calculate creditworthiness based on the borrower’s liquid assets rather than regular income streams, such as salaries or wages.

How Asset Depletion Loans Work

Unlike traditional loans, which primarily consider an applicant’s income and credit score, asset depletion loans focus on the borrower’s asset value. Lenders assess the borrower’s liquid assets—like savings accounts, investment portfolios, and retirement accounts—to determine the loan amount they can offer. This approach allows individuals with high asset values but low traditional income to access credit.

Importance for Specific Borrowers

Asset depletion loans can be crucial for retirees, investors, and self-employed individuals who need to finance a purchase or investment but do not have the regular income typically required for a loan. By utilizing their assets, borrowers can leverage their wealth to meet their financial goals without liquidating their investments.

Understanding the eligibility criteria and required documentation is vital for borrowers considering an asset depletion loan. Lenders have specific requirements to qualify for this type of loan, focusing on the borrower’s assets.

Eligibility Criteria

Applicants must have significant liquid assets to be eligible for an asset depletion loan. These assets typically include:

  • Cash and cash equivalents
  • Stocks, bonds, and mutual funds
  • Retirement accounts (IRAs, 401(k)s)
  • Other investment accounts

The exact criteria will vary by lender, but the common thread is that the assets must be easily accessible and convertible into cash. The borrower should also have a favorable credit history. However, the credit score requirements may be less stringent than for traditional loans, given the focus on assets.

Required Documentation

Lenders require detailed documentation to verify the borrower’s assets. This documentation may include:

  • Bank statements
  • Brokerage accounts
  • Retirement account statements
  • Other financial statements showing proof of ownership and value

Some lenders also require an appraisal of the assets, mainly if they include real estate or other non-liquid investments. Accurate and up-to-date documentation is essential for a smooth loan application process.

Types of Assets Considered

While liquid assets are preferred, some lenders may consider semi-liquid or fixed assets under certain conditions. However, the emphasis is always on the ability to liquidate the assets if necessary to repay the loan. Borrowers need to understand that not all assets are created equal in the eyes of lenders, and some may carry more weight than others.

Calculation of Loan Amount

Determining the loan amount for an asset depletion loan involves a specific formula that varies slightly between lenders. However, the core methodology remains consistent: it is based on the total value of the borrower’s assets and the expected duration the assets need to last.

Formula Used for Asset Depletion Loans

Most lenders use a standard formula to calculate the loan amount:

  1. Total Asset Value: Add all eligible liquid assets.
  2. Subtract Any Down Payment: If the loan is for a property purchase, subtract the down payment from the total asset value.
  3. Divide by Loan Term: Divide the resulting figure by the number of months of the loan term. The loan term typically ranges from 180 months (15 years) to 360 months (30 years). Some exceptions exist to this rule, where some lenders have a much shorter term.
  4. Monthly Depletion Amount: The result is the monthly depletion amount that the lender will consider income.

Examples of Calculation

For instance, if a borrower has $1,000,000 in liquid assets and is looking to get a loan with a 30-year term (360 months), the calculation would be as follows:

$1,000,000/360≈$2,777.78 per month.

This monthly amount would be what the lender considers as the borrower’s income from assets, which is then used to determine the loan size, considering other factors such as existing debts, credit score, and the lender’s loan-to-value ratio.

Factors Affecting the Loan Amount

  • Interest Rates: Higher interest rates can reduce the loan amount since they increase the cost of borrowing.
  • Age of the Borrower: Some lenders adjust the calculation based on the borrower’s age, with the rationale being that older borrowers may need their assets to last a shorter period.
  • Loan-to-Value Ratio (LTV): A lower LTV may be required for asset depletion loans than traditional loans, affecting the total loan amount.

Understanding these factors is crucial for borrowers to estimate the loan amount they might receive and to plan their finances accordingly.

Pros and Cons of Asset Depletion Loans

Asset depletion loans can be advantageous for specific borrowers, but like any financial product, they come with potential drawbacks. Borrowers need to weigh these carefully before proceeding.

Benefits for Borrowers

  • Flexibility for Non-Traditional Income Earners: Ideal for retirees, entrepreneurs, and consumers with uneven cash flows and significant assets but lack a steady income stream.
  • Potential for Larger Loan Amounts: If a borrower has considerable assets, they may qualify for a more significant loan amount than what they would receive with a traditional income-based loan.
  • Avoidance of Asset Liquidation: Borrowers can keep their investment portfolios intact and possibly avoid capital gains taxes from selling off assets to generate cash.

Potential Risks and Downsides

  • Interest Rates: Asset depletion loans may come with higher interest rates than traditional mortgage loans due to the perceived increased risk by lenders.
  • Depletion of Assets: Over the loan term, there’s a risk of depleting assets, which can impact long-term financial stability.
  • Complexity and Scrutiny: The loan application process can be more complex, and lenders may scrutinize the borrower’s financial situation more closely.

Comparison with Traditional Loans

Understanding the nuances between asset depletion loans and traditional loans can help borrowers decide which is more suitable for their circumstances.

Key Differences from Traditional Loans

  • Income Verification: Traditional loans require proof of income, whereas asset depletion loans focus on liquid assets.
  • Interest Rates and Terms: The terms and interest rates can differ significantly, often less favorable in asset depletion loans due to the different risk profiles.
  • Qualification Process: The qualification process for asset depletion loans can be more involved, requiring detailed asset documentation and sometimes a more substantial down payment.

Situations Where Asset Depletion Loans Are Preferable

Asset depletion loans are often preferable for borrowers who:

  • Have a high net worth but a low taxable income.
  • Want to purchase a property without selling off investments.
  • Are retired and have significant savings but no regular income.

Comparison with Traditional Loans

When considering asset depletion loans, it’s essential to understand how they stack up against traditional loan options. This comparison can guide borrowers in making an informed decision about which loan type best fits their needs.

Key Differences from Traditional Loans

  • Income Consideration: Traditional loans focus on income and employment history for loan qualification. In contrast, asset depletion loans assess borrowers’ ability to pay (ATR) based on their liquid assets.
  • Debt-to-Income Ratio: A low debt-to-income ratio is crucial for traditional loans, whereas asset depletion loans are less concerned with monthly income and more with the overall asset base.
  • Underwriting Process: The underwriting process for asset depletion loans is often more complex, requiring a thorough evaluation of the borrower’s assets, whereas traditional loans follow a more standardized income verification process.

Interest Rates and Terms

  • Interest Rates: Interest rates for asset depletion loans may be higher due to the lender’s perceived risk associated with the lack of traditional income.
  • Loan Terms: Borrowers might find more flexibility in the loan terms for asset depletion loans, but this can vary significantly from lender to lender.

Situations Where Asset Depletion Loans Are Preferable

Asset depletion loans may be a better option for individuals:

  • Who are self-employed with variable income but significant assets.
  • Have retired and have considerable savings or investment income.
  • Wish to invest in property without disturbing their investment strategies.

Borrower Considerations

  • Financial Goals: Borrowers should consider their long-term financial goals and how the loan type will impact their wealth management.
  • Market Conditions: Current market conditions can influence interest rates and terms, affecting the decision between a traditional and an asset depletion loan.
  • Lender Expertise: It is also crucial to work with lenders who have expertise in asset depletion loans to ensure proper handling of the loan process.

Application Process

The application process for asset depletion loans is intricate and requires careful preparation. This section provides a step-by-step guide to navigating the application, with tips for a successful outcome and common pitfalls to avoid.

Step-by-Step Guide to Applying

  1. Asset Evaluation: Begin by thoroughly evaluating your assets. Prepare a detailed list of your liquid assets and recent statements to verify their value.
  2. Lender Research: Research potential lenders who offer asset depletion loans and understand their specific requirements and terms.
  3. Pre-Application Inquiry: Engage in pre-application discussions with lenders to clarify questions and ensure you meet their eligibility criteria.
  4. Documentation Gathering: Collect all necessary documentation, including bank statements, investment portfolio summaries, and other asset statements.
  5. Application Submission: Complete the loan application form, attach all required documentation, and submit it to the lender.
  6. Underwriting Process: The lender will review your application during the underwriting process, which may involve additional requests for information or clarification.
  7. Loan Offer Review: Upon approval, carefully review the loan offer, paying close attention to the interest rates, terms, and any additional fees.
  8. Closing the Loan: If you accept the loan offer, you’ll proceed to the closing process, which includes signing the loan agreement and managing the disbursement of funds.

Tips for a Successful Application

  • Accuracy: Ensure all information provided is accurate to prevent delays or denial.
  • Professional Advice: Consider hiring a financial advisor or attorney to help navigate the complexities of asset depletion loans.
  • Response Time: Respond promptly to any lender requests for additional information.

Common Mistakes to Avoid

  • Incomplete Documentation: Failing to provide all necessary documentation can lead to application delays or denial.
  • Overestimating Assets: Be realistic about the valuation of your assets; overestimation can lead to issues during the underwriting process.
  • Ignoring Terms and Conditions: Not thoroughly understanding the loan’s terms and conditions can lead to surprises.

Case Studies

Real-life examples can provide valuable insights into the process and potential outcomes of securing an asset depletion loan. This section features case studies illustrating how borrowers have successfully utilized asset depletion loans to meet their financial needs.

Case Study 1: The Retired Investor

John, a recently retired individual, has a sizeable investment portfolio but a reduced regular income after retirement. He wanted to buy a second home without liquidating his investments, which would have incurred significant capital gains taxes. John applied for an asset depletion loan, using his portfolio as proof of his ability to repay the loan. The lender considered his assets and granted him a loan with terms. John was able to purchase the home and maintain his portfolio.

Case Study 2: The Self-Employed Entrepreneur

Sarah, a self-employed entrepreneur, had irregular income streams but substantial cash in the bank and an impressive stock portfolio. She needed funds to buy a new property. Still, her variable income made it challenging to qualify for a traditional loan. An asset depletion loan provided her with the necessary funds, using her evidence of the cash in the bank and stock as the basis for her loan application. The loan enabled her to purchase her dream home without selling her assets.

Lessons Learned:

  • Self-employed individuals with variable income can benefit from asset depletion loans.
  • Asset depletion loans can provide the flexibility needed for entrepreneurs and self-employed people to buy property without sacrificing their asset base.

Lenders and Interest Rates

Regarding asset depletion loans, the landscape of lenders and the interest rates they offer can vary greatly. Potential borrowers should be well-informed about where to look for these loans and how to compare the rates and terms.

Overview of Lenders Offering Asset Depletion Loans

  • Traditional Banks: Some banks offer asset depletion loans but may require a pre-existing relationship with the borrower.
  • Private Lenders: Private lenders might specialize in asset-based lending and can offer more tailored products for individual needs.
  • Mortgage Brokers often provide more flexible options and a streamlined application process.

Comparison of Interest Rates and Terms

Interest rates and terms are crucial factors in any loan decision. Here are some aspects to consider:

  • Rate Comparison: Borrowers should compare rates from several lenders to find the most competitive offer.
  • Fixed vs. Adjustable Rates: Decide whether a fixed or adjustable-rate loan fits your financial situation better.
  • Fees and Penalties: Understand all the associated costs, including origination fees, closing costs, and prepayment penalties, if any.

Negotiating with Lenders

  • Asset Portfolio: Presenting a solid asset portfolio can give you a better position to negotiate terms.
  • Financial Health: Demonstrating overall financial health beyond just assets can also be advantageous.
  • Market Knowledge: A good understanding of the current financial market can provide leverage in negotiations.

Finding the Right Fit

Choosing the right lender involves balancing the interest rates with the quality of service and the lender’s understanding of asset depletion loans. Borrowers should look for lenders who are accustomed to dealing with high-net-worth individuals and non-traditional income streams.

Continuing with the “Tax Implications” section:

Tax Implications

Asset depletion loans can have significant tax implications, and understanding these is critical for borrowers to ensure they are making the most financially savvy decisions.

Consulting with a Tax Professional

Given the complexities of tax law and its implications on financial products:

  • Professional Advice: It is highly advisable to consult with a tax professional or financial advisor who can provide personalized advice based on the borrower’s specific financial situation.
  • Tax Law Changes: Tax laws can change, affecting the benefits and drawbacks of asset depletion loans. Staying informed about these changes is essential.

Documentation and Record Keeping

  • Thorough Records: Borrowers should keep detailed records of all transactions related to their asset depletion loans for tax purposes.
  • Annual Reviews: Conduct yearly reviews of your financial situation and tax implications, especially if there are significant changes in income, assets, or tax laws.

Future of Asset Depletion Loans

The financial market is ever-evolving, and the sector of asset depletion loans is no exception. Understanding the trends and predictions in this niche can help borrowers and investors anticipate changes and make informed decisions.

Trends in the Market

  • Increasing Popularity: There’s a growing trend of asset depletion loans as the population ages and more retirees look for ways to finance their lifestyles without a traditional income.
  • Technological Advancements: Technology is making it easier for lenders to assess and manage asset depletion loans, which could lead to more competitive products and services.
  • Diversification of Products: Lenders are increasingly offering various asset depletion loan products to cater to a broader range of borrowers.

Predictions for the Future

  • Regulatory Changes: Potential regulatory changes could affect the asset depletion loan market by expanding and easing access to these loans or imposing more stringent requirements.
  • Market Volatility: The impact of economic cycles on investment portfolios could influence the viability of asset depletion loans for both lenders and borrowers.
  • Demographic Shifts: As the Baby Boomer generation continues to enter retirement, their borrowing habits may significantly shape the future of asset depletion lending.

Staying Informed

For potential borrowers, staying informed about these trends is critical:

  • Continuous Learning: Keep abreast of financial news and market developments related to asset-based lending.
  • Professional Networks: Engage with financial advisors and networks that can provide insights into the future of asset depletion loans.
  • Flexibility in Planning: Maintain flexibility in financial planning to adapt to changes in the loan market.

Doctor Loans Program with Minimal Down Payments

Creative Solutions for Doctors with Negative Savings to Acquire Homes with Minimal Down Payments

Considering the Doctor Loans Program by Blake Mortgage. Would this be the answer for physicians with negative savings?

The dream of owning a home may seem out of reach for doctors with negative savings due to hefty student loans and other financial obligations. However, several creative solutions can help these professionals achieve homeownership, even with minimal or no down payment. This article will explore a few strategies doctors can consider to make their home-buying aspirations a reality.

  1. Physician Home Loans: 

Physician home loans, or doctor loans, are specialized mortgage programs explicitly designed for medical professionals. These loans are offered by certain lenders who understand the financial challenges doctors face, including negative savings resulting from extensive education and training. Physician home loans often require little to no down payment and have more flexible underwriting criteria, taking into account future earning potential. By leveraging this type of loan, doctors can overcome their negative savings and purchase a home with minimal upfront costs.

  • Partnering with Medical Organizations:

    Another potential option for doctors with negative savings is to explore partnerships with medical organizations or hospitals. Some medical institutions provide housing benefits or assistance to their employees, especially those in high-demand specialties. These benefits may include low-cost housing, subsidized rent, or down payment assistance. By taking advantage of such opportunities, doctors can secure affordable housing options while minimizing upfront costs. It is worth reaching out to the human resources departments of medical organizations or hospitals to explore these housing benefits and determine eligibility.

While negative savings may seem a significant obstacle to homeownership, doctors have several options. Physician home loans, down payment assistance programs, and partnering with medical organizations can all help doctors acquire homes with minimal or no down payment. It is crucial for doctors to thoroughly research and explore these options to find the best fit for their specific circumstances. With careful planning and utilization of these strategies, doctors can fulfill their dreams of owning a home, regardless of their negative savings.

doctor loans program

Doctor Loans by Blake Mortgage

Doctor Loans by Blake Mortgage is a specialized mortgage program designed to meet the unique needs of medical professionals. This document provides an overview of the loan program, including loan amounts, eligibility criteria, underwriting guidelines, and other vital details. Whether you are a medical doctor, dentist, pharmacist, or nurse, Blake Mortgage offers tailored financing options to help you achieve your homeownership goals.

Loan Amounts

The Doctor Loans program offered by Blake Mortgage provides maximum loan amounts of up to $1,500,000. This generous loan limit allows medical professionals to purchase high-value properties and accommodate their specific needs.

Underwriting Guidelines

The underwriting guidelines for Doctor Loans are by the Non-Agency Underwriting Guidelines, with some product-specific criteria. It is important to note that additional guidelines not mentioned in this document must meet the parameters specified in the Non-Agency Underwriting Guidelines.

Eligible Borrowers

To be eligible for a Doctor Loan, at least one borrower must hold a valid license in one of the approved medical fields. The eligible licenses include the following:

  1. Medical Resident (Educational License)
  2. Medical Doctor (MD)
  3. Doctor of Dental Surgery (DDS)
  4. Doctor of Dental Medicine (DMD)
  5. Doctor of Optometry (OD)
  6. Doctor of Ophthalmology (MD)
  7. Doctor of Pharmacy (PharmD)
  8. Doctor of Podiatric Medicine (DPM)
  9. Doctor of Osteopathy (DO)
  10. Doctor of Veterinary Medicine (DVM)
  11. Physician Assistant
  12. Registered Nurse
  13. Nurse Anesthetist
  14. Nurse Practitioner
  15. Clinical Nurse Specialist

Furthermore, the occupying borrower must provide proof of a valid license within one of the approved medical fields and meet the following requirements:

  • The borrower must be within ten years of the start of their profession.
  • For Medical Doctors, the borrower must be an active medical resident or within the first ten years of their profession, measured from the completion date of their residency.
  • The borrower must be actively engaged in the eligible profession.

It is important to note that all borrowers can have only one outstanding Professional or Doctor loan at any given time. Additionally, borrowers should not have any other second homes or investment properties financed with the originating bank at the time of closing. Therefore, the total number of financed properties held by all borrowers should be at most four.

Ineligible Borrowers:

All trusts are considered ineligible borrowers for the Doctor Loans program.

Eligible Property Types

The Doctor Loans program covers the following property types:

  1. 1-unit properties
  2. Fannie Mae warrantable condominiums
  3. Planned unit developments (PUDs)
  4. Modular homes

Minimum Credit Scores

For minimum credit score requirements, refer to the Eligibility Grid provided by Blake Mortgage.

Qualifying Rate

The qualifying rate for the Doctor Loans program varies based on the ARM (Adjustable Rate Mortgage) term:

  • 5/6 ARM: The greater of the fully-indexed rate or note rate plus 2%.
  • 7/6 ARM & 10/6 ARM: The greater of the fully-indexed rate or note rate.

Qualifying Ratios

The maximum Debt-to-Income (DTI) ratio allowed for Doctor Loans is 45%. However, if the borrower has student loan debt that is deferred for at least 12 months from the application date, the DTI may exceed 45% up to a maximum of 50%. In such cases, the borrower must qualify using a payment equal to 1% of the outstanding balance on the student loans. It is important to note that the maximum DTI of 45% may only be exceeded due to the deferred student loan debt payments.


Reserves are important in determining the borrower’s ability to handle mortgage payments. The required reserves for Doctor Loans are as follows:

  • Loan Amount up to $850,000: 3 months of verified Principal, Interest, Taxes, Insurance, and Association (PITIA) reserves.
  • Loan Amount $850,001 – $1,500,000: 6 months of verified PITIA reserves.

When borrowers have financed properties in addition to the subject property, an additional six months of PITIA reserves are required for each property.

Interested Party Contributions

Interested party contributions refer to funds contributed by parties involved in the real estate transaction, such as the property seller, builder, real estate agent/broker, mortgage lender, or any other party with an interest in the transaction. These contributions can be used exclusively to cover closing costs and prepaid expenses.

The following contribution limits apply based on the Combined Loan-to-Value (CLTV) ratio:

  • CLTV up to 90%: Maximum 6% interested party contribution.
  • CLTV up to 97%: Maximum 3% interested party contribution.

Minimum Borrower Contributions

Borrowers must contribute at least 3% of the transaction from their funds. The remaining funds can come from a gift per the Non-Agency Underwriting Guidelines, an acceptable FNMA-eligible Community Seconds Program, or an approved Gift/Grant Program.

Appraisal Requirements

The Appraisal Review Department will review all appraisals for Doctor Loans. The appraisal requirements depend on the loan amount:

  • Loan Amount up to $1,000,000: One full appraisal.
  • Loan Amount greater than $1,000,000: One full appraisal and a field review or two full appraisals.

Mortgage Insurance

Doctor Loans are underwritten by approved mortgage insurance companies. Each mortgage insurance provider may have additional restrictions not listed in this document. It is recommended to refer to each mortgage insurance company’s website for complete details.

Standard Mortgage Insurance Guidelines

Doctor Loans require mortgage insurance coverage based on the Loan-to-Value (LTV) ratio. The coverage requirements are as follows:

  • LTV 95.01 – 97%: 35% coverage.
  • LTV 90.01 – 95%: 30% coverage.
  • LTV 85.01 – 90%: 25% coverage.
  • LTV 80.01 – 85%: 12% coverage.


Doctor Loans by Blake Mortgage provides a comprehensive financing solution tailored to the unique needs of medical professionals. With competitive loan amounts, flexible underwriting guidelines, and specific eligibility criteria, this program aims to support doctors, dentists, pharmacists, nurses, and other medical professionals in their homeownership journey. By understanding the loan program’s features and requirements outlined in this document, medical professionals can make informed decisions and take advantage of the benefits offered by Blake Mortgage’s Doctor Loan program.

Don’t wait! Find out about your options today!

The Top 5 Misconceptions About VA Home Loans

Are you a veteran looking to buy your primary home? It’s exciting, but there may be misconceptions surrounding VA home loans. Therefore, it’s vital to get the facts about these loans upfront. You will make the right decision by knowing the facts about VA loans.

What type of property can you qualify for? How much down payment do you have to put down? And other related student loan debt issues that might come into play.

A range of loan options, such as 100% Loan to Value (LTV)

For more information

No-money-down loans with competitive rates are available. VA loans contrast traditional financing programs like FHA or conventional mortgages. These types of mortgages require significant cash outlays up-front. The borrower must also pay monthly PMI premiums if the down payment is less than 20%.

Let us explore some common misconceptions about VA Home Loans. So you’ll feel more confident when making decisions regarding this financial commitment!

1. You Have to Be a Veteran to Qualify for a VA Loan

A widely-believed misconception about VA loans is that you must be a veteran to qualify. In reality, eligibility for this beneficial home financing option extends beyond veterans alone.

The following may also be eligible candidates for obtaining a VA loan.

  • Active-duty service members
  • National Guard and Reserve members
  • and certain surviving spouses of deceased military personnel

By broadening the scope of potential borrowers, the Department of Veterans Affairs aims to provide support. It is not only to those who have served in the past but also to individuals currently serving our country and their families.

It is essential for all potential buyers, both veterans, and non-veterans, to become familiar with the options available. This is when considering purchasing or refinancing a home. Examples of such opportunities include VA loans and other veteran-friendly mortgage solutions. This will enable them to make educated decisions. That aligns with their housing requirements while taking full advantage of the benefits they have earned due to their commitment and service to our nation.

2. VA Loans Require a Down Payment

Another common belief is that VA loans require a down payment. Contrary to this misconception, you might be surprised to learn. One of the primary advantages of securing a VA loan is its zero-down-payment feature. The ability for qualified borrowers such as active-duty military members to purchase homes without needing any initial down payment eases their financial burdens.

Of course, voluntarily putting forth an amount towards your home can help reduce your overall mortgage balance. Even lower monthly payments if desired. However, it’s not mandatory when utilizing a VA loan. Additionally, eligible applicants usually have access to competitive interest rates. This is comparing to conventional mortgages, requiring no private mortgage insurance (PMI) fees. Further saving money in both short-term and long-run scenarios.

This essential fact shatters yet another myth. What many consider one of the most beneficial federal programs available exclusively for US servicemen and women seeking homeownership opportunities today.

3. There Are Too Many Restrictions

Specific guidelines indeed need to be followed when utilizing a VA loan. However, most of these regulations serve as protections for veterans and lenders while aiming for long-term success in homeownership. Contrary to popular belief, acceptable uses include purchasing single-family homes and condos approved by the Department of Veterans Affairs (VA), building new constructions, or refinancing existing properties.

Property appraisals must meet specific requirements concerning safety standards and overall condition. Such criteria typically align with those involved in conventional mortgages. Additionally, certain property types, like vacation homes or investment properties, will not qualify under this program. Ultimately, understanding which limitations apply ensures smoother transactions without sacrificing opportunities available through the valuable benefit provided by VA loans.

4. All Lenders Provide the Same Terms for a VA Loan

Contrary to popular belief, not all lenders offer the same terms for a VA loan. In addition, there’s variation among lending institutions with regard to interest rates, fees, underwriting standards, and overall service offerings within their VA mortgage programs. Therefore, you must research multiple lenders for the right fit to maximize your financial benefits through this specialized home financing option.

Some banks cater specifically to military customers by providing tailored solutions designed around the unique needs of veterans and active-duty personnel alike. These niche providers can help ensure a smooth experience throughout every stage of the process, from prequalification up until closing day! Comparing different options empowers you as an informed buyer to get what you want from your dream home purchase, using valuable assistance from reliable sources like the Department of Veterans Affairs (VA)

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It is important to remember that being proactive during the lender search will ultimately bring great success in homeownership.

5. Applying For a VA Loan is Difficult and Takes a Long Time

One common misconception about VA home loans is that applying for them can be difficult and takes a long time. However, this couldn’t be further from the truth! Obtaining a VA loan has become easier, with streamlined processes to assist military service members striving to purchase or refinance their homes.

To begin with, choosing an experienced lender who specializes in working with veterans will help guide you through each step of the application process effortlessly. Moreover, many lenders now offer online applications that reduce paperwork while providing access to resources designed specifically for your unique situation as a veteran borrower, saving effort and valuable time! Furthermore, getting prequalified ahead of house-hunting simplifies your search and helps fast-track closing when you finally find your dream property.

Ultimately, knowing these facts ensures that you make well-informed choices regarding such mortgages, thereby maximizing benefits catered exclusively towards active-duty personnel and veterans like yourself!

VA home loans provide an excellent opportunity for eligible veterans to purchase homes that may have otherwise been beyond their reach. Blake Mortgage offers VA loans of all types:

And can help improve the lives of service members, disabled veterans, and surviving spouses by providing access to quality housing solutions. With flexible interest rates, low or no down payment options, and other unique features available through the program, it’s easy to see why so many choose this route when buying a new home.

We want you to be informed about your financial decisions, so we encourage anyone considering taking advantage of these benefits to contact us today!

Credit and Lending

Why This Blog? 

Hi, my name is Harry Panosian, and I have been in the mortgage business for over 25 years. I worked for a mortgage banking firm early in my mortgage banking career. Since 2002 I’ve owned Blake Mortgage, NMLS ID 150459, an Arizona-licensed mortgage broker specializing in residential mortgages. 

I’ve always wanted to write a book on mortgage finance but have yet to set aside the time to do it. I wanted to write this book to teach people what I learned while originating loans. Throughout my career, I’ve realized that ordinary and extraordinary people struggled with the process. What’s scary is that most consumers need to understand how they arrive at an interest rate and fees to which they agree to pay for the loan term. 

Even the most sophisticated borrowers need help understanding how to price a loan so that they are paying the lowest given rate with the lowest offered fees at the time the loan funds. Rates and fees are a market function, and that cycle has to follow the consumers buying or refinancing cycle. If interest rates are on an upward trend, it will naturally cost more to borrow money, and if they are on a declining trend, it will cost less. Of course, that’s oversimplifying it, but it is one of the many factors discussed in the following blog series.


This Blog series aims to teach you a shortcut to an outcome. What do I mean by that? This course will not make you an expert in mortgages, nor make you a loan officer for which you need a license to practice, but it will teach you step-by-step how to shop for the cheapest fees and the lowest rate for your given mortgage transaction. What I’m about to share with you is not rocket science, but you need to do a teeny-weeny bit of homework, which will save you tens of thousands of dollars throughout the term of your loan. 

The Internet has millions of pages about rates, fees, loan programs, etc. Still, none shows the industry insider knowledge you need to get the lowest interest rate with the lowest costs on your next mortgage. When you complete this shortcut to an outcome, you will keep more of your hard-earned money in your pocket and not give it to the bank. 

Please remember that this blog should not be considered legal or tax advice. Please consult your attorney or CPA for tax and legal advice.

The discussed laws and principles are as they apply in the state of Arizona only. However, you could use rate and fee shopping techniques discussed in any jurisdiction subject to federal banking laws, the Dodd-Frank Act, the CFPB, RESPA, the “Truth in Lending Act,” and other applicable laws. 


Before you start shopping for a mortgage or, better yet, before you even call the realtor, please go to this URL www.annualcreditreport.com and get a free copy of your credit report. The government allows you an annual retrieval of your credit report, giving you a snapshot of your credit profile for your entire life. 

Remember, don’t call the realtor. Stay out of the Internet looking for a mortgage broker. Do this first. 

The second step is to review your credit and ensure that your information is accurate and that your credit balances are correct. Look for inconsistencies, late payments, charge-offs, liens, and other irregularities. With clear credit, sufficient income, and assets to cover your debt-to-income ratio, and you have the required down payment, you will get a mortgage.  

You have work to do if you have any late payments, incorrect credit balances, bankruptcies, charge-offs, medical collections, and tax liens which are notorious for ruining credit reports. 

I can share an anecdote about a doctor whose own practice had submitted an unpaid balance on a medical insurance claim to a collection agency. It was the doctor’s practice turning him into the collection agency. He still needed to learn that the insurance company had yet to pay a hundred percent of the claim. People sometimes forget that just because you have health insurance, the insurance company will cover the billed items from the hospital or doctor. In reality, the insurance company may only pay a portion, and some of that bill may be your responsibility, which people tend to ignore. Then months go by until they discover a medical collection has been charged-off and credit ruined. 

Credit Bureaus  

Three credit bureaus are repositories of your financial DNA. They are:  

a. Experian  

b. Equifax   

c. Trans Union  

These three credit bureaus receive your payment history monthly from most of your creditors. Each creditor may have their reporting timetable, but they report to the repositories each month. 

If you notice, I said “most “of your creditors and not all of your creditors. The reason is some creditors choose not to report to avoid competing creditors from raiding their accounts with new offers. It is especially true for creditors with higher rates than the market, who want to keep those accounts from competing offers with lower interest rates. 

To stay on top of your credit, you should sign up with one of the credit bureaus mentioned above for monthly reporting of your credit profile. This service is free if you sign up with one credit bureau. They will try to upsell you to sign up for all three bureaus, which will set you back, usually by thirty dollars or more. You do not need to do this. Just sign up for the free one. 

In addition to the credit bureaus, there are credit reporting agencies which number in the hundreds, that provide the tri-merge credit report that most lenders require, which shows all of your credit scores from the three repositories. More on that later. 

As I mentioned, if you have any dings on your credit, such as late payments collections, charge-offs, bankruptcies, repossessions, short sales, foreclosures, etc., you need to address them individually. There’s nothing you can do about late payments other than make sure that they reflect the true nature of the delinquency. Time will heal them, and it depends on the type of debt. Mortgage late payments are a big no-no. That is supposed to be your most important obligation, and lenders frown upon that. Different guidelines apply depending on the mortgage loan you are trying to get. However, that is one of the more severe delinquencies you could have. Government programs are generally more forgiving on credit dings than other conventional financings. 

If there are any open collections on your credit report, it behooves you to contact the collection agency, and you can usually negotiate a lower settlement than what’s outstanding. However, the longer the collection stays “open, “the more impact it will have on lowering your credit score. 

During the great recession, which we’ll discuss in detail later, there were a lot of foreclosures. “Short sales” were not even invented then. Government-sponsored agencies that securitize many conforming loans relaxed some of the restrictions governing these loans, but there is still a “Seasoning “requirement on these events. 

Identity Theft & Credit Freeze  

Not a day goes by that you don’t hear about somebody’s identity being “stolen” and their lives ruined. Or worse. You hear about some hacker from a remote location hacking into a large corporation’s database and stealing personal data, including Social Security numbers, dates of birth, home addresses, income information, etc. 

Cybersecurity experts continuously remind us to protect our online access with sophisticated passwords and change them regularly to stay ahead of the hacker’s reach. It is a cumbersome process. Yet necessary. Identity theft protection will not guarantee against hacker intrusion. If you want to avoid this type of violation against you, it’s best to have your credit frozen at each of the three credit bureaus. It can make things a little bit more difficult for you, but if you do not need an immediate loan, you could always unfreeze your account, and once you complete the transaction, you can “Freeze” your credit again. 

If you put a credit “freeze” on your account and apply for credit, lenders will contact you for permission to do what they need. 

FICO & Credit Scoring 

Watch this video: 


Credit scoring is a numerical representation of your credit habits. It considers available credit at your disposal, the amount utilized, payment and length of history, the number of recent inquiries, and new and open accounts — other factors include derogatory items that we discussed earlier. 

Since there are three separate credit repositories, each provides its credit scores. Most lenders use the middle number of the three to represent your overall credit. 

Your credit scores will determine what loan programs may be available to you. The higher your credit score, the more liberal your lending terms will be. FICO scores range from a low of 300 to a high of 850. Most lending programs will not lend on scores below 620. There are, however, exceptions to this rule, as nonconventional lenders may lend on scores as low as 500. But the rates on these types of loans that are considered subprime loans will be prohibitive, and the down payment requirement will be a lot more than conventional loans. 

What if you do not have a credit score or any conventional credit? Some programs will use nonconventional credit, such as your monthly rent payments, utility payments, etc., to underwrite your file manually, but that is beyond the scope of our conversation here. 

Just remember to maintain good credit habits by paying your bills on time, making prudent decisions with your use of credit, and refraining from opening those tempting department store and hardware store offers to open new credit in return for a discount on your purchase at the store, may hurt you on the long run. 

Credit Lates & Foreclosures 

In a deed of trust state like Arizona, generally, once you are 90 days late, the lender will commence the foreclosure process with a “NOD” or a “Notice of Default.” A “NOD” means you will get a letter from the lender citing a notice of default, threatening to auction your home at a public sale on the courthouse steps. The late fees will start mounting, and legal fees will soon ensue if you cannot bring the current loan. Finally, the foreclosure process will begin.

In non-deed of trust states, the process is different and usually takes a more extended period, as foreclosure is a judicial process. It means that it will go through the courts until you settle. 

You want to avoid foreclosure at all costs. 

The great recession in 2008 brought a slew of foreclosures, short sales, and bankruptcies. It reached unheard-of levels as homeowners could not keep up with their mortgage payments. As a result, their property values severely declined, consumers lost jobs, and many properties had encumbrances greater than their appraised values. As a result, consumers unable to sell abandoned these properties, and lenders began foreclosing on them. This chain of events had a tremendous impact on the real estate market for years.  

Recovery was slow. The foreclosure and short sale effects on credit scores were severe. Consumers who were once homeowners were now paying rent. For a borrower to qualify for a conventional mortgage, lenders generally require seven years of seasoning for foreclosures. Since this catastrophe, lenders have eased up on the seasoning requirements for foreclosures and short sales. At this writing, the seasoning requirement on a Fannie Mae and Freddie Mac loan for “Foreclosure” and “Short sale” is generally four years. Please check with your lender for the specific seasoning requirements. Typically, federally insured and guaranteed loans such as FHA and VA have a more liberal seasoning requirement. 

A chapter 7 bankruptcy also has a four-year requirement, and lenders frown upon borrowers who have Any credit dings post-bankruptcy. 

These seasoning requirements are continually changing depending on market conditions. It used to be that all short sales and foreclosure seasoning was seven years. 

Short Sales  

The “short sale” came into vogue with the advent of the great recession. The overwhelming number of foreclosures was causing an oversupply of inventory. Lenders came up with a solution: the Short Sale. By working with homeowners who had lost their jobs and could no longer afford their mortgage payments, the short sale provided them with a more graceful exit. It made those properties available for purchase by other borrowers. The process usually took 6 to 12 months, and realtors started specializing in short-sale property. The Short Sale solution eased the oversupply of inventory in the marketplace, and it was the beginning of the recovery in the housing market. 

Even though the short sale alleviated the oversupply in inventory, the impact on credit scores was severe. However, As the market recovered, Fannie Mae and Freddie Mac were more lenient on consumers with short sales instead of “foreclosures.” This distinction would help borrowers later as they tried to get new mortgages as the seasoning requirement was different for foreclosures versus short sales. 


There are three types of bankruptcies:  

 Chapter 7, Chapter 11, and Chapter 13 

Generally, getting a conventional loan will be challenging if you have any bankruptcy that is still in process.  

Once you have established credit after bankruptcy and do not have any derogatory credit, post a specific “Seasoning” period, you will most likely be able to get a conventional loan if all other underwriting criteria are met, such as income, assets, employment, and down payment.

Government programs have more liberal seasoning requirements than conventional loans. Check with your loan officer to see the applicable seasoning for the given loan program. 

Some programs out there charge very high fees and interest rates that will finance borrowers with more recent bankruptcies; however, they require large down payments. Therefore, I suggest scrutinizing these programs before originating such a loan. 

Credit Rescoring  

credit rescoring occurs when a borrower is a few points shy of a target credit score, and they pay down some debt and get their rescoring entity to do a simulation that will, in most cases, bring up the credit score for a borrower to qualify for a given loan. 


You have to pay tax and mechanic’s liens before or at funding; otherwise, you will not be able to get the loan. These liens take precedence over a first mortgage; therefore, the lender will not fund the loan when these liens are present. 

Furthermore, even if paid off, a federal tax lien may disqualify a borrower because the lender will most likely require additional information for the delinquency. 

Credit Inquiries  

Inquiries constitute 15% of your credit score. Therefore, repeated queries to open new accounts, especially in the last 24 months, may hurt your overall score. 

Applicants are always concerned that a credit inquiry will impact their scores adversely, especially when applying for a mortgage loan if various lenders pull their scores repeatedly. In addition, consumer credit inquiries from online retailers and many others will also impact the score.

The best way to avoid this would be to do your homework ahead of time with annual credit report.com and be confident of your score. 

 Borrower’s History  

Your credit report also includes the following:

      • Your employment history.

      • Residential history.

      • Any variations of your name.

      • Phone number.

      • Date of birth.

      • Any tax lien.

      • Bankruptcy.

      • Other types of delinquencies. 

    Be aware that the consumer credit act compels creditors to remove derogatory credit from your credit report over seven years old. Some exceptions apply here. Please check out the link below for more information on the consumer-credit-protection-act.


    How to Shop for A Mortgage

    Shopping for a mortgage can be daunting. But it’s essential to securing a home loan that fits your needs and budget. The Consumer Financial Protection Bureau (CFPB) has created a “Home Loan Toolkit” to help you navigate the process. This guide will break down the critical steps in the shopping process. Including understanding the different types of mortgages, comparing offers from multiple lenders, and negotiating the terms of your loan.

    Dealing and Negotiating Key Steps

    Step 1: Understand the Different Types of Mortgages

    Before you start shopping for a mortgage, you must understand the different types of mortgages available. The most common types of mortgages are:

    • Fixed-rate mortgages: These mortgages have a fixed interest rate for the life of the loan, typically 15 or 30 years. Your monthly payment stays the same throughout the loan term, making budgeting easier.
    • Adjustable-rate mortgages (ARMs): These mortgages have a variable interest rate that changes over time. ARMs usually have a lower initial rate than fixed-rate mortgages. But your monthly payment can increase or decrease based on market conditions.
    • Government-backed mortgages: FHA, VA, and USDA loans are insured by the government. Often have more flexible credit and income requirements but may require mortgage insurance.

    Once you understand the different types of mortgages, you can start to determine which type of loan is best for you. Based on your financial situation and long-term goals.

    Step 2: Compare Offers from Multiple Lenders

    When shopping for a mortgage, comparing offers from multiple lenders is essential to find the best deal.

    Here are the key factors to consider when comparing offers:

    • Interest rate: The annual percentage rate (APR) your loan charges. A lower interest rate means you’ll pay less in interest over the life of your loan.
    • Points and fees: Lenders may charge points and fees, upfront costs added to your loan. Comparing these costs between lenders ensures you get the best deal.
    • Loan term: This is the length of time you have to repay your loan. A longer loan term may result in a lower monthly payment. But you’ll pay more in interest over the life of the loan.
    • Closing costs: These are the costs of closing your loan, such as appraisal, title insurance, and attorney fees. Comparing closing costs between lenders is essential to ensure you’re not overpaying.

    When comparing offers, request a Loan Estimate from each lender. This document outlines the terms of your loan and provides an itemized list of all costs associated with the loan. Use this document to compare offers and negotiate with lenders.

    Step 3: Negotiate the Terms of Your Loan

    Once you’ve compared offers and selected a lender, it’s time to negotiate the terms of your loan.

    Here are some key factors to consider when negotiating:

    • Interest rate: You can negotiate a lower interest rate with good credit and a solid financial history. Be sure to provide documentation of your financial history to support your request.
    • Points and fees: You can negotiate lower points and fees.
    • Loan term: If you’re struggling to make the monthly payment on a 15-year fixed-rate mortgage, you can negotiate a longer loan term. To reduce your monthly payment.
    • Closing costs: You can negotiate lower closing costs by shopping around for services. You can ask the seller to pay some of the costs.

    It’s important to remember that not all lenders are willing to negotiate. So be prepared to shop around if you’re not satisfied with the terms offered by your lender.

    Step 4: Close Your Loan

    Once you’ve negotiated the terms of your loan, it’s time to close the loan.

    Here are the critical steps in the closing process:

    • Review the Closing Disclosure.
    •  Your lender is required to provide a Closing Disclosure at least four days before closing. This document outlines the final terms of your loan, including the interest rate, points and fees, and closing costs. Review this document carefully to ensure there are no errors or surprises.
    • Arrange for a final walkthrough: Before closing, you’ll want to do a final walkthrough of the property to ensure everything is in order and any repairs have been completed.
    • Bring required documentation: You’ll need to bring several documents to closing, including proof of homeowners insurance, government-issued ID, and funds for the balance of your down payment and closing costs. You may also wire the funds in advance.
    • Sign the paperwork: At closing, you’ll sign a lot of paperwork, including the mortgage note, the deed of trust, and various disclosures. Be sure to read everything carefully and ask questions if anything needs clarification.
    • Fund the loan: Once you’ve signed all the paperwork, your lender will fund the loan, which means they’ll transfer the money to the seller, and the property will officially become yours.

    Closing a loan can be complex, so working closely with your lender and real estate agent is essential to ensure everything goes smoothly.

    Step 5: Manage Your Mortgage

    Once you’ve closed your loan, managing your mortgage responsibly is essential to ensure that you don’t fall behind on payments and risk foreclosure.

    Here are some tips for managing your mortgage:

    • Set up automatic payments: Many lenders offer the option to set up automatic payments, which can help ensure you never miss a payment.
    • Stay up-to-date on your taxes and insurance: Your lender will likely require you to escrow your property taxes and homeowners’ insurance, which means they’ll collect these payments as part of your monthly mortgage payment. It’s crucial to stay up-to-date on these payments to avoid penalties and coverage gaps.
    • Monitor your credit: Your mortgage payment history is reported to the credit bureaus, so it’s essential to monitor your credit score and report for any errors or issues.
    • Refinance if necessary: If interest rates drop or your financial situation improves, consider refinancing your mortgage to lower your monthly payment or pay off your loan faster.

    Shopping for a mortgage can be a complex process. Still, by understanding the different types of mortgages, comparing offers from multiple lenders, negotiating the terms of your loan, closing the loan, and managing your mortgage responsibly, you can find a home loan that fits your needs and budget. The CFPB’s Home Loan Toolkit provides additional information and resources to help you through the process.

    For more information or to set up a free consultation, please click here:

    To get started today, click here:

    Rental Property Mortgage: A Complete Guide

    Investing in rental property can be a lucrative financial decision for those with the resources to do so. However, one of the critical factors in successfully owning a rental property is securing the right mortgage to finance it. This guide will discuss the various loan options available, the application process, down payment requirements, closing costs, tax benefits, risks, challenges, and frequently asked questions about obtaining a mortgage for rental property.

    Loan Options

    When it comes to securing a mortgage for rental property, there are several loan options available. Here are a few of the most common:

    Conventional Loans:

    These loans are not backed by the government and typically require a higher credit score and down payment. The interest rates for conventional loans are often lower than government-backed loans.

    FHA Loans:

    These loans are backed by the Federal Housing Administration and are designed for first-time homebuyers or those with lower credit scores. FHA loans have lower down payment requirements but typically have PMI, which translates into higher interest rates. FHA Loans are for primary homes only. Click here for more info on FHA loans.

    fha loan

    VA Loans:

    These loans are backed by the Department of Veterans Affairs are available to current and former members of the military and their spouses. VA loans typically have lower interest rates and do not require a down payment. VA Loans are for primary homes. Click here for more info on VA loans.

    USDA Loans:

    These loans are backed by the U.S. Department of Agriculture and are designed for those purchasing properties in rural areas. USDA loans often have lower interest rates and do not require a down payment. However, these loans are only for primary homes as well.

    Non-QM Loans:

    These are Non-Qualified mortgages, the funding source for which is from private investors and generally require a 25% down payment and no income documentation is needed so long as the DSCR (Debt service coverage ratio,) meets the lender’s requirement. Click here for more info on DSCR loans.

    Application Process

    The mortgage application process for rental property is similar to a traditional home purchase. Here are the steps involved:

    Private Mortgage Insurance


    Before beginning your property search, getting pre-approved for a mortgage is a good idea. The pre-approval will show you how much you can afford to spend on a rental property.

    Property Search:

    Once you are pre-approved, you can begin your property search. Remember that lenders may have specific requirements for the type of property they will finance, such as the number of units and the property’s condition.

    Submit Application:

    You must submit a mortgage application when you find a property you want. The application includes information about your income, assets, and credit history.

    Property Appraisal:

     After submitting your application, the lender will order an appraisal of the property to determine its value.


    Once the appraisal is complete, the lender will begin underwriting the loan. This process involves verifying your income and employment and reviewing your credit history and other financial information.


    If your loan is approved, you will need to attend a closing meeting to sign the loan documents and pay any closing costs.

    Down Payment:

    The down payment required for rental property will depend on the type of loan you are applying for and the lender’s requirements. Generally, conventional loans require a down payment of 20% or more.

    Putting down a larger down payment can help reduce your monthly mortgage and even help you secure a lower interest rate.

    If you do not have the funds available for a down payment, there are some options for financing it. For example, you can take out a personal loan or use a home equity loan from another property you own.

    Closing Costs:

    Closing costs are fees associated with obtaining a mortgage, including appraisal, title insurance, underwriting, origination, and escrow fees. The total closing cost can range from 2% to 5% of the total loan amount. Some lenders may offer to cover some or all of the closing costs, which often results in a higher interest rate.

    Tax Benefits:

    Owning rental property can come with several tax benefits. One of the most significant benefits is the ability to deduct mortgage interest from your taxable income. In addition, other rental property expenses help reduce your overall tax liability and increase your cash flow.

    Additionally, rental property owners may take advantage of depreciation deductions, which allow them to deduct a portion of the property’s value over time. However, It is important to note that tax laws can be complex, and consulting with a tax professional is recommended to ensure you maximize your deductions and follow all applicable tax laws.

    Risks and Challenges:

    Owning rental property can also come with several risks and Challenges. One of the most significant risks is the possibility of vacancies, which can lead to a loss of income and difficulty making mortgage payments.

    Additionally, rental properties require ongoing maintenance and repairs, which can be costly and time-consuming. Managing tenants can also be challenging, as you may encounter difficult tenants or deal with eviction proceedings.

    Therefore, before investing in rental property, it is essential to carefully consider these risks and challenges and ensure you have the financial resources and expertise to manage them.


    How do I qualify for a mortgage for a rental property?

    To qualify for a mortgage for rental property, you will typically need to have a good credit score, a stable income, and a down payment of at least 20% for a conventional loan. You may also need to meet specific requirements set by the lender, such as a certain debt-to-income ratio or a minimum rental income requirement.

    What are the required documents for a mortgage application?

    The documents required for a mortgage application may vary depending on the lender, but typically include proof of income (such as tax returns and pay stubs), bank statements, and documentation of any assets or debts.

    What should I consider when choosing a loan for a rental property?

    When choosing a loan for rental property, you should consider factors such as the interest rate, down payment requirements, and closing costs. You should also consider the type of loan that best fits your financial situation and investment goals.


    Obtaining a mortgage for rental property can be a complex process, but with the correct information and resources, it is possible to navigate it successfully. By understanding the various loan options, the application approach, down payment requirements, closing costs, tax benefits, risks and challenges, and frequently asked questions related to rental

    property mortgages, you can make informed decisions and maximize your chances of success as a rental property owner.

    For more information, schedule an appointment with Blake Mortgage by clicking the link below.

    Mortgage Rates Rising!

    Mortgage rates have spiked up to almost 7%, the highest level over a decade, causing concern among homeowners and potential buyers alike. Inflation is a crucial factor impacting mortgage rates and the real estate market, and it’s essential to understand the implications of these trends. This article will explore why mortgage rates have spiked, how inflation affects the real estate market, and why it’s important to buy now versus wait later.

    Mortgage rates have spiked due to a variety of factors, including:

    1. Inflation: Inflation is the primary driver of higher mortgage rates. The Federal Reserve may raise interest rates to combat inflation as inflation increases. When interest rates rise, so do mortgage rates.
    2. Economic Growth: Economic growth can also impact mortgage rates. As the economy grows, demand for credit increases, leading to higher interest rates.
    3. Government Policy: Government policies can also impact mortgage rates. For example, the Federal Reserve’s decision to end its bond-buying program in 2014 led to higher mortgage rates.

    How Inflation Affects the Real Estate Market?

    Inflation significantly impacts the real estate market, particularly in areas with high demand and limited supply. The following are some of the ways inflation is impacting the real estate market:

    1. Higher Home Prices: As inflation increases, so do home prices. The increase in home prices is due to the higher cost of building materials, labor, and other inputs, driving up the cost of new homes. In addition, existing homeowners may be more reluctant to sell their homes, as the cost of buying a new home is also higher.
    2. Higher Mortgage Rates: Higher inflation leads to higher mortgage rates, making it more expensive to buy a home. Higher rates can dampen demand and slow down the housing market.
    3. Tighter Credit Standards: Inflation can also lead to tighter credit standards, as lenders become more cautious about lending in a higher interest rate environment. Stricter underwriting criteria make it more difficult for some buyers to qualify for a mortgage.

    Buy Now versus Later?

    Given the current trends in the real estate market, buying now may be advantageous rather than waiting. Here are a few reasons why:

    1. Mortgage Rates are Likely to Continue Rising: Mortgage rates have already spiked and will continue rising as inflation remains high. The cost of borrowing will be higher in the future, making it more expensive to buy a home.
    2. Home Prices are Also Likely to Continue Rising: As we’ve discussed, inflation drives home prices, which will likely continue. Waiting to buy a home may mean paying more in the future as home prices continue to rise.
    3. Limited Supply: In many markets, there is a limited supply of homes for sale, making it challenging to find the right home at the right price. It may mean you need more inventory to buy a home.

    In Conclusion …

    The Greater Phoenix market is experiencing many of the same trends we’ve discussed above. Here are a few key points to consider:

    1. Home Prices are Rising: According to Zillow Phoenix the median home value in Phoenix is currently $398,899, an increase of 4.6% over the past year. In Scottsdale, the median home value is $750,908, up 6.3% over the past year. Zillow Scottsdale

         2. Limited Inventory: There is a limited inventory of affordable homes for sale in all three markets.

         3. High Demand: Despite rising home prices and limited inventory, demand remains high in these markets. 

    Given the current trends in these markets, buying now may be advantageous rather than waiting later. However, with a limited inventory of affordable homes and high demand, waiting to purchase a home may mean missing out on the limited stock that is currently available. In addition, as mortgage rates continue to rise, the cost of borrowing will be higher, making it more expensive to buy a home.

    In conclusion, various factors have spiked mortgage rates, including inflation, economic growth, and government policy. Inflation is significantly impacting the real estate market, leading to higher home prices, higher mortgage rates, and tighter credit standards. Given these trends, buying now may be advantageous rather than waiting later, especially in markets with limited inventory and high demand, such as Phoenix, Arizona, Scottsdale, and Maricopa County. By acting now, potential buyers can take advantage of the limited inventory and lower mortgage rates, securing a home at a lower price and avoiding higher borrowing costs in the future.

    Rising rates

    “No Cost Loan?” There’s No Free Lunch!

    Over the years, lenders have marketed a specific type of loan generically known as a “No-cost loan.”

    There is no free lunch!

    What do I mean by that? First, there are many costs associated with originating the loan.

    It includes:

    • underwriting
    • credit reporting
    • appraisal
    • inspection
    • escrow
    • title insurance
    • endorsements
    • origination
    • taxes
    • homeowners association
    • courier
    • notary
    • insurance
    • and other fees required to originate and fund a mortgage loan.

    The loan estimate and closing disclosure break down these fees so the borrower can see the actual cost.

    Origination Fee

    One of the most significant fees associated with the origination process is the origination fee. It is a fancy way of saying the broker’s commission. For example, suppose the borrower decides to “Buy down” the rate. In that case, they pay a discount fee. As the borrower, you get to choose the interest rate you want to pay for your loan. But the price you pay for this rate at par has zero discount or zero premium points. Therefore you must pay an origination fee to the broker. Each broker has their origination agreement that they charge on loans. Suppose the borrower does not want to pay this origination fee, which is usually 1% of the loan amount; In that case, they can bump the interest rate to a higher rate, and the lender will pay a yield spread, which is a percentage of the loan amount they can use to pay for some of the costs associated with the loan.

    not a free lunch

    The borrower can’t use the yield spread to pay the broker’s origination fee, but it can help pay for other loan costs, such as the title insurance or appraisal fee.

    There are two types of compensation on loans:

    lender-paid compensation and borrower-paid compensation.

    In a lender-paid compensation scenario to the broker, the interest rate includes the lender-paid compensation agreed upon in advance with the lender. This rate/APR is usually higher than the rate/APR for “borrower-paid compensation,” which the borrower will pay out of his funds. Usually, the yield spread will be 1% of the loan amount for every quarter-point increase in interest rate. For example, say the broker quotes a rate of 6% for a 30-year fixed loan for $100,000. Generally, if the rate is bumped up by 25 basis points or to 6.25%, the lender will pay you 1% of the loan amount. In the amount of $1000 for you to use for your closing costs. In a lender-paid compensation scenario, the additional yield is characterized as lender-paid compensation “outside of closing.” Meaning that it will not come out of your funds at closing.

    It Makes Sense

    However, in the long run, you will be paying more interest to compensate the lender. It is for the upfront “lender-paid compensation to the broker. Sometimes, it makes sense to go for lender-paid compensation. This is especially if you won’t be in the house for an extended period.

    First, however, you must calculate the benefit of the higher interest rate and how that will impact your cash flow. Usually, it is in your best interest to negotiate the broker’s compensation and pay the broker from your funds. The “Loan Toolkit,” comes in handy, as you can compare multiple lenders’ offers and see which works best for you. Therefore, the actual cost of the “No-Cost” mortgage loan is in the details. By increasing your interest rate, you are paying a higher interest rate/APR and, therefore, more interest over the life of the loan than you would otherwise if you chose to pay all the loan’s closing costs yourself. Sometimes it makes sense to go for the higher rate, especially if you’re tight on cash and need help closing the loan with funds from other than your own.

    What is a “No-Cost” mortgage loan?

    To summarize, a “No-Cost” mortgage loan is a type of loan marketed by lenders as having no closing costs. However, this is not entirely accurate, as there are still costs associated with originating the loan, such as underwriting, credit reporting, appraisal, inspection, escrow, title insurance, endorsements, origination, taxes, homeowners association, courier, notary, insurance, and other fees.

    One of the most significant fees associated with the origination process is the origination fee, which is the broker’s commission. If the borrower decides not to pay this fee, they can opt for a higher interest rate, and the lender will pay a yield spread, which is a percentage of the loan amount they can use to pay for some of the costs associated with the loan. However, in the long run, the borrower will pay more interest to compensate the lender for the upfront lender-paid compensation to the broker.

    Therefore, the actual cost of a “No-Cost” mortgage loan is in the details. It is essential to calculate the benefit of the higher interest rate and how that will impact your cash flow in the long run. It may make sense to negotiate the broker’s compensation and pay the broker from your funds. The Loan Toolkit at www.blakemortgage.com/loan-toolkit can be helpful in comparing multiple lenders’ offers and determining which works best for you.

    Important Note

    It’s important to note that sometimes it may make sense to go for a higher interest rate, especially if you’re tight on cash and need help closing the loan with funds from sources other than your own. However, it’s crucial to weigh the benefits and drawbacks of each option and determine which is the most cost-effective in the long run.

    When considering a “No-Cost” mortgage loan, it’s crucial to review the loan estimate and closing disclosure provided by the lender. These documents will break down all the fees associated with the loan, including the interest rate, and help you determine the actual cost of the loan. In conclusion, a “No-Cost” mortgage loan may sound like an attractive option, but it’s essential to understand that there are still costs associated with originating the loan. It’s crucial to weigh the benefits and drawbacks of each option and determine which is the most cost-effective in the long run. Reviewing the loan estimate and closing disclosure provided by the lender and negotiating with the broker can help you make an informed decision and ensure that you’re getting the best deal possible.

    Bank Statement Loans for The Self Employed

    In recent years, bank statement loans have become increasingly popular as an alternative form of financing. This type of loan is for those who may not meet traditional lending criteria. These loans are specifically designed for self-employed individuals, small business owners, and entrepreneurs. Who have difficulty providing the necessary documentation to prove their income.

    What are bank statement loans?

    Bank statement loans, also known as self-employed loans. Alternatively known as income verification loans. They are a type of mortgage that allows borrowers to use their bank statements as proof of income. Instead of providing traditional income documentation such as pay stubs or W-2s, borrowers can use their bank statements. This is to demonstrate their income over a specific period, typically ranging from 12 to 24 months.

    The lender will review the borrower’s bank statements to determine their income and assess their ability to repay the loan. Typically, lenders will require a minimum of 12 months of bank statements, and some may require up to 24 months. The bank statements will need to show consistent deposits. The lender will also consider the borrower’s credit score, debt-to-income ratio, and other financial factors when making a lending decision.

    How do bank statement loans work?

    Bank statement loans do not work similarly to traditional mortgages. The borrower will apply for the loan and provide the necessary documentation, including their bank statements. The lender will review the application. Then assess the borrower’s creditworthiness based on their credit score, debt-to-income ratio, and other financial factors.

    If approved, the lender will offer a loan with specific terms, including the interest rate, loan amount, and repayment period. The borrower will need to review and sign the loan agreement. The lender will disburse the funds directly to the borrower or their designated account.

    One key difference between bank statement loans and traditional mortgages is the interest rate. Bank statement loans typically have higher interest rates than traditional mortgages. This is due to the higher risk associated with borrowers who cannot provide traditional income documentation. However, these loans offer an alternative for those who may not qualify for traditional mortgages.

    What is required for a bank statement loan?

    To apply for a bank statement loan, borrowers will need to provide the following documentation:

    1. Bank statements: Borrowers will need to provide a minimum of 12 months of bank statements. Some lenders may require up to 24 months. The bank statements will need to show consistent deposits to demonstrate the borrower’s income.
    2. Credit score: Lenders will assess the borrower’s creditworthiness based on their credit score. There is no specific minimum credit score required. Borrowers with higher credit scores are more likely to be approved and may receive more favorable loan terms.
    3. Debt-to-income ratio: Lenders will also consider the borrower’s debt-to-income ratio. Which is the percentage of the borrower’s monthly income that goes toward debt payments. A lower debt-to-income ratio indicates that the borrower has more disposable income. May be more likely to repay the loan.
    4. Employment history: Bank statement loans are designed for self-employed individuals. Lenders may still require a minimum employment history to demonstrate stability.

    Case Studies

    Let’s take a look at two hypothetical case studies to understand how bank statement loans work in real life.

    Case Study 1: Sarah, a freelance graphic designer

    Sarah is a freelance graphic designer who has been self-employed for the past two years. She earns a good income but has difficulty providing traditional income documentation as her income varies from month to month. She decides to apply for a bank statement loan to purchase a new home.

    Sarah provides 24 months of bank statements to the lender, which show consistent deposits and a steady income. The lender assesses her credit score and debt-to-income ratio and determines that she is a good candidate for a loan. The lender offers Sarah a loan with a 5.5% interest rate, which is higher than traditional mortgages but still within her budget.

    Sarah reviews and signs the loan agreement, and the lender disburses the funds to her designated account. She uses the loan to purchase her dream home and is able to make timely repayments based on the agreed terms.

    Case Study 2: John, a small business owner

    John is a small business owner who has been running his business for three years. His business is profitable, but he has difficulty providing traditional income documentation as he reinvests most of his profits back into the business. He decides to apply for a bank statement loan to expand his business operations.

    John provides 24 months of bank statements to the lender, which show consistent deposits and a steady income. The lender assesses his credit score and debt-to-income ratio and determines that he is a good candidate for a loan. The lender offers John a loan with a 6.5% interest rate, which is higher than traditional mortgages but still within his budget.

    John reviews and signs the loan agreement, and the lender disburses the funds directly to his business account. He uses the loan to purchase new equipment and expand his business operations. John is able to make timely repayments based on the agreed terms and is pleased with the success of his business.

    Benefits of bank statement loans

    Bank statement loans offer several benefits for self-employed individuals, small business owners, and entrepreneurs who may have difficulty providing traditional income documentation. These benefits include:

    1. Flexible income verification: Bank statement loans allow borrowers to use their bank statements as proof of income, providing flexibility for those who have varying income levels.
    2. Faster loan approval: Bank statement loans may have a faster approval process compared to traditional mortgages as lenders do not need to review and verify traditional income documentation.
    3. Alternative financing option: Bank statement loans provide an alternative financing option for those who may not meet traditional lending criteria.
    4. Customizable terms: Bank statement loans may have customizable terms to suit the borrower’s specific needs and financial situation.

    Alternative Financing

    Self-employed individuals often face challenges when it comes to obtaining traditional mortgages due to their income documentation requirements. However, bank statement loans offer an alternative financing option for self-employed borrowers.

    Click here for various types of mortgage loans for the self employed:


    Bank statement loans are also known as alternative income documentation loans, as they allow borrowers to use their bank statements as proof of income. These loans are often popular among self-employed individuals and small business owners, who may not have traditional income documentation such as W-2s or pay stubs.

    The lender typically reviews the borrower’s bank statements for a specified period, such as 12 to 24 months, to determine their income level and stability. The lender may also consider other factors such as the borrower’s credit score and debt-to-income ratio when assessing their eligibility for the loan.

    One of the benefits of bank statement loans is their flexibility in income verification. Self-employed individuals may have varying income levels and may not be able to provide traditional income documentation. Bank statement loans allow borrowers to use their bank statements as proof of income, which can provide more flexibility in the application process.

    Another benefit of bank statement loans is their faster approval process. As the lender does not need to review and verify traditional income documentation, the loan approval process may be faster compared to traditional mortgages. This can be particularly beneficial for borrowers who need to secure financing quickly.

    Case Study 3: Jane, a freelance writer

    Jane is a freelance writer who has been working for herself for five years. She has a steady income from her writing projects, but she has difficulty providing traditional income documentation such as W-2s or pay stubs. She decides to apply for a bank statement loan to purchase a new home.

    Jane provides 24 months of bank statements to the lender, which show consistent deposits and a steady income. The lender reviews her credit score and debt-to-income ratio and determines that she is eligible for a loan. The lender offers Jane a loan with a 5.5% interest rate, which is higher than traditional mortgages but still within her budget.

    Jane reviews and signs the loan agreement, and the lender disburses the funds to her designated account. She uses the loan to purchase her new home and is able to make timely repayments based on the agreed terms.

    Case Study 4: Mark, a real estate investor

    Mark is a real estate investor who owns several rental properties. He has a steady rental income but has difficulty providing traditional income documentation due to his investment portfolio. He decides to apply for a bank statement loan to purchase a new rental property.

    Mark provides 12 months of bank statements to the lender, which show consistent rental income deposits. The lender assesses his credit score and debt-to-income ratio and determines that he is eligible for a loan. The lender offers Mark a loan with a 6% interest rate, which is higher than traditional mortgages but still within his budget.

    Mark reviews and signs the loan agreement, and the lender disburses the funds directly to his designated account. He uses the loan to purchase the new rental property and is able to make timely repayments based on the agreed terms.

    Bank statement loans offer several benefits for self-employed individuals, small business owners, and real estate investors who may have difficulty providing traditional income documentation. These loans allow borrowers to use their bank statements as proof of income, providing flexibility and faster loan approval. While bank statement loans may have higher interest rates than traditional mortgages, they offer a viable solution for those who may not qualify for traditional financing options.

    To apply for a bank statement loan, please click here:



    Loans for the self employed provide an alternative financing option for self-employed individuals, small business owners, and entrepreneurs who may have difficulty providing traditional income documentation. These loans allow borrowers to use their bank statements as proof of income, providing flexibility and faster loan approval. While bank statement loans may have higher interest rates than traditional mortgages, they offer a viable solution for those who may not qualify for traditional financing options. It’s important to work with a reputable lender and review the loan terms carefully to ensure that the loan is within your budget and suits your specific needs.