Smart Mortgage Strategies for Real Estate Investors & Business Owners
Legacy Blueprint: Plan It Forward
Mike Bascom interviews Tom Hutchens of Angel Oak Mortgage Solutions about leveraging non-QM mortgage products for wealth building and legacy pl
Key takeaways
- Non-QM mortgages primarily serve self-employed borrowers whose tax write-offs artificially lower net income on paper.
- Angel Oak Mortgage Solutions evaluates credit, assets, bank statements, and payment history rather than relying solely on tax returns.
Main topics
- Non-QM mortgages
- real estate investing strategies
Notable quotes
"home ownership is really a key to wealth building."
Conclusion
Listeners gain actionable insights into using strategic financing and alt
Transcript preview
Speaker 3 (0:00) The easiest for people to understand, a big piece of our business is for self-employed borrowers. and those that, you know, business owners. And business owners generally have a good accountant. And one of the benefits of being a small business and a business owner itself is that you can write things off that due to the tax code. So your net income doesn't necessarily reflect your ability to repay a mortgage. And so that's been the biggest product for the non-QM space is the self-employed borrower because Fannie Mae, they only have one way of looking at it. It's your tax returns. and it's the net number at the bottom of your tax returns, and that's it. And we take a different approach. We look at a little more holistically, you know, looking at someone's credit, their assets, their history of paying mortgages of the size that they're looking to get. And then we look at bank statements to look at income versus tax returns. Speaker 1 (0:54) Welcome to Legacy Blueprint. Plan it forward. the podcast where top thought leaders in law, finance, and wealth planning come together to guide your future. Hosted by Distinguished Estate Planning Attorney Mike Bascom, each episode highlights industry experts who bring clarity, innovation, and proven strategies to the table. Because building a legacy isn't a solo act, it's the result of a team of professionals working in harmony. Join us weekly as we showcase the leaders shaping tomorrow and give you the tools to plan with confidence. today. Speaker 2 (1:32) Joining me today is Tom Hutchins, president of Angel Oak Mortgage Solutions and a nationally recognized leader in the mortgage industry with more than 25 years of experience helping borrowers navigate today's evolving lending landscape. Tom has been at the forefront of non-QM lending for over a decade, and today he's here to share valuable insights on how smart mortgage strategies can support long-term financial security. real estate investing, and building a lasting legacy for your family. Tom, welcome to the podcast. Speaker 3 (2:06) Hey, thanks, Mike. Happy to be here. Speaker 2 (2:08) Tom, I know you spent more than 25 years in the mortgage industry, and now you lead one of the country's top non-QM lenders. What trends are you seeing today that every homeowner and future homeowner should be paying attention to? Speaker 3 (2:23) Well, you know, one thing that's always really been a constant is that home ownership is really a key to wealth building. The markets change, interest rates change, supply and demand change. But just over a period of time, those that own homes seem to build wealth more successfully than those that don't. So, you know, the trends in the market are. They differ. If we're talking kind of Atlanta and the North Georgia market, it's different than South Florida or Texas or Tennessee. You know, there's lots of different pockets. But, you know, one thing that we've worked hard on here at Angel Oak is just to offer some products and programs that help expand homeownership and make homeownership available to more types of borrowers. You know, everyone knows kind of when you... You get asked, what's the rate? That's a Fannie Mae rate. And Fannie Mae is a government program, and they were never meant to give every single American a loan. They were really meant to help a certain bucket of borrowers. And then we've just seen the opportunity outside that space to help Speaker 2 (3:32) others get into the market. Speaker 3 (3:34) You Speaker 2 (3:34) know, Steve, I know many listeners think of mortgages simply as a way to buy a home. I know many of our listeners think of mortgages simply as a way to buy a home, but how can the right financing strategy become an important part of the family's long-term financial and estate plan? Speaker 3 (3:50) Well, I think it's really leverage. It's just, you know, what are you going to do with your capital? I've always considered... paying down a mortgage or living in a home without a mortgage, it's almost kind of a dead investment because the home is going to appreciate the same amount, whether you owe zero on it or whether you owe a million dollars on it. So I'm a big fan of leverage in order to maximize your returns. I tell you a trend, you asked about trends earlier. One trend that we've seen is there's a lot of investors in the marketplace today. And I'm talking mom and pops, you know, individuals that say, hey, I want to own a few rental homes and manage them themselves and use the Airbnb or VRBO model. And that really has transcended. It's like in our space, it's almost 50 % of the business now are for these businesses We call them professional investors, but that can mean that, you know, somebody that owns one investment property or two investment property. You know, it's not, we're not talking about the big corporations that own hundreds and hundreds, but it's allowed, you know, Wall Street to, or excuse me, Main Street borrowers to kind of participate similarly to Wall Street itself. Speaker 2 (5:05) Interesting. You know, for those that are unfamiliar with the term, what exactly is a non-QM mortgage? And who tends to benefit the most from those types of loan programs? Speaker 3 (5:15) Non-QM stands for non-qualified mortgage, which I am not a big fan of because it's not, it's non-qualified, but it's non-qualified for a Fannie Mae loan, an agency loan. So it's not that it's a bad mortgage or the person just doesn't qualify, but Fannie Mae has very... tight requirements in order to qualify for one of their loans. But I would say the most, the