EasyPath Mortgage Program

What is JVM’s EasyPath Mortgage Program?

JVM’s EasyPath Mortgage Program offers a revolutionary way to purchase a new home before selling your current one. This program is tailored to ease the transition for homeowners looking to buy again and addresses the common challenge of qualifying for a new mortgage while still being financially responsible for the existing one.

How EasyPath Works

EasyPath is designed to bring your Debt-to-Income ratio (DTI) down so that you can break free of traditional underwriting guideline restrictions when buying a new home.

Traditionally, if you are looking to buy a new home before selling your current home, underwriting guidelines require that you show enough household income to cover the housing payments on both homes – even if you plan to sell your old one as soon as you move or it’s already on the market to sell. Unfortunately, this is often a deal-killer for hopeful buyers because accounting for two housing payments at once will push debt ratios far too high for loan approval.

EasyPath solves this problem. It strategically removes the mortgage payment of your current home from the DTI calculation, thus enhancing your qualification prospects for a new mortgage. It does this by partnering with an outside investor who signs a fully ratified, non-contingent contract to purchase your home within 180 days of your new home purchase.

With this signed contract in place, underwriters can ignore the current housing expense when calculating your debt ratios because they have a guarantee that the current home will be sold.

The program features:

180-Day Guarantee

Unlike other buy-before-you-sell programs, which usually offer only 90 days, JVM’s EasyPath gives you a full 180 days to sell your home.

This extended six-month timeframe affords homeowners greater flexibility and time to effectively market their property and secure the best possible sale price.

While our investor strongly encourages you to sell in that 180-day period, if the home is not sold within this period, the EasyPath investor will execute their contract and purchase the property. They will then immediately relist the home for sale.

Affordable Option Premium

At just $2,500*, the program is more affordable than the high fees or rates charged by bridge lenders. Most alternative programs charge anywhere from 1.5% – 2.4% of either the loan amount or sale price, which can be 10x more expensive by comparison.

Profit Guaranteed

The EasyPath partner investor does not want to purchase your home. Rather, they hope that the home sells to someone else in the first 180 days so that they can cancel their pending contract.

So, if the home sells in the first 180 days, you keep 100% of the profits. The only fee you will have paid is the $2,500* flat fee.

But, if the home does not sell by then, the investor is legally obligated to perform on their contract and will purchase the home. Then, they will immediately re-list the home to sell to a third party. Once sold, they will return 90% of the profits (net sale costs) back to you.

Flexible Equity

You can have loans covering up to 75% of your home’s value and still qualify for this program. So, while the EasyPath program does not lend you funds against your home’s equity, it is a perfect option to use in conjunction with a Home Equity Line of Credit (HELOC).

If you need to pull some equity out of your current home to use towards the purchase of your new home, a HELOC is a very cost-effective tool that can help. And, because the EasyPath program disregards all current housing expenses from your new mortgage loan approval, your loan approval will not be negatively affected if you do take some equity out.

However, it is crucial that you leave at least 25% equity in your home, otherwise EasyPath’s investors will not extend their offer.

What Is Debt-To-Income (DTI) and Why Does It Matter?

DTI is a crucial metric used by lenders to assess a borrower’s ability to manage monthly payments and repay debts. It represents the ratio of your monthly debt payments to your gross monthly income. A lower DTI is often a key factor in securing loan approval, as it indicates a balanced financial situation.

If your DTI exceeds a program’s maximum, you will not be approved.

Why Choose EasyPath Instead Of A Bridge Loan?

Homebuyers considering purchasing a new home before selling their existing one have multiple options, each with its own financial and time-related implications. It’s crucial to weigh these factors thoroughly to make an educated decision. One popular alternative to JVM’s EasyPath Mortgage Program is a bridge loan.

A bridge loan involves borrowing against the equity of your current home to finance the down payment for a new property. Its main advantage over the EasyPath program is the immediate availability of funds for a down payment, provided you have sufficient equity in your current home. However, bridge loans are significantly more costly than the EasyPath Mortgage, often being at least ten times more expensive.

A commonality between the two options is their ability to overlook the housing payment on the current home during underwriting. This feature helps improve a buyer’s debt-to-income ratio, potentially qualifying them for a larger home.

Comparison of a EasyPath and Bridge Loans

• Pro: Unlike JVM’s EasyPath Mortgage, a bridge loan will give you money to use towards a down payment, assuming you have enough equity.
• Con: The total costs of a bridge loan are multiples higher than an EasyPath Mortgage (roughly at least 10 times more expensive).
• Same: Both will allow underwriting to ignore the housing payment on the current home, freeing up a buyer’s debt ratios to qualify for a larger home.

Example Buy-Before-You-Sell Scenario Using EasyPath

Background

Let’s consider a homeowner, Alex, who currently owns a home and has a monthly payment of $3,500. Alex wants to purchase a larger home for her family but is unable to receive mortgage loan approval with her current mortgage outstanding.

Step 1: Get Pre-Approved with JVM Lending

• Alex should first complete a loan application and receive her pre-approval letter from JVM Lending. This is not only a requirement for the EasyPath investor, it is the best way to make sure Alex is fully informed about her loan options.

Step 2: Receive an EasyPath Contract

• Once pre-approved and confident she is choosing the right program, Alex will apply for an EasyPath contract (with help from JVM Lending) that guarantees her new home will be sold within 180 days.

Step 3: Win An Offer on a New Home

• With both the JVM Lending Pre-Approval Letter and the EasyPath Contract in hand, Alex can start making offers on homes within the price range she is pre-approved for.
• Once she wins an offer and closes on her new home, the 180-day window to sell her previous property begins.

Step 4: The 180-Day Selling Window

• Alex lists the home on the market with an aim to sell for the maximum value. Depending on how long it takes for someone to purchase her home, there are 2 possible outcomes.

Outcome Scenarios

• Scenario 1: Home Sells Within 180 Days: Alex manages to sell the home for $750,000. The proceeds of the sale pay off her mortgage and any sale costs, such as transfer taxes and Realtor commissions. All remaining profits are returned to her.
• Scenario 2: Home Does NOT Sell Within 180 Days: The EasyPath investor steps in and purchases the home for the agreed-upon value, typically 75% of the market value. Then, the investor immediately puts the home back on the market to sell it to a third party. Once the home sells, the investor returns 90% of the net profits (after sale costs and Realtor commissions) back to Alex.
  • If the net profits after sale costs are $75,000, Alex will receive $67,500.

Summary

In this scenario, Alex can confidently move forward with purchasing a new home, backed by the financial strategies and safeguards provided by JVM’s EasyPath Mortgage Program. She has low fees and a generous window of time in which to sell her home after purchasing her new one.

Your Next Steps

Take the stress-free and financially sensible path to your new home with JVM’s EasyPath Mortgage Program. Reach out to JVM Lending at (855) 855-4491 or hello@jvmlending.com for a consultation and start your journey to a brighter, more secure home-owning future.

Additional information about JVM’s EasyPath Mortgage Program:  Buy Before You Sell With JVM’s EasyPath Mortgage Program

*The flat $2,500 fee applies for homes valued at $1.3M or less; a flat $3,500 fee applies for homes valued over $1.3M. Market value is determined at the time of service and may be based on an appraisal, broker price opinion, or other valuation method.