I hope you had a wonderful long weekend, and like any other day, I decided to spend my Monday in the office and get caught up… again!
I am starting to hear from clients that they do not want to sell and buy because they have a 2.5% interest rate on their $500,000.00 mortgage (800K value), and if they sell and move up, then they will have a $750,000.00 mortgage ($1Mil price) and they will likely get a rate that is 1.5%+/- higher! That is a true statement and a hard objection to get over, but here are some facts that could help you:
I will not go into all the real reasons for wanting to move, better schools, bigger space, Tommy and Suzie still share a bedroom, but those are real-life facts!
Adding a simple bed and bath could cost $75,000.00 – $100,000.00 on a second mortgage would add $500-$665 to your payment on a 2nd Mortgage. Add a new kitchen, flooring, landscape, and a patio cover? Now we are $150 – $200K +++, and your payment is currently going up by $1,000 -$1,330 +++ per month.
Your new payment on the $1 Mil property with a $750K loan is 1.5% higher, and your payment goes up by about $1,500.00
If you stay and remodel, you could be overbuilding for the neighborhood. Remodel’s generally take longer and cost more than you expect. You also get to live in a construction zone, which can be a challenge!
If you move, you would have moving costs, realtor fees (already accounted for above), and the hassle of moving.
The math is hard right now with people that got those low-interest rates. It may take a little work, and you can always come to me to go over the numbers with your sellers. It’s even tougher to get people to move down when they are going from a lower rate to a higher rate, so the move has to be pretty extreme to make sense.
Interest rates have been better over the past week, but they are a tad worse today. Does that mean they are better than a month ago? NOPE!!! We have been at this level or lower 17.5% of the time over the past 50+ years! If people think they will go down in the short term, they will miss the boat!
30-year Government Loans (FHA / VA) are in the mid to high 3’s
Conventional Loans up to $647,200.00 – high 3’s and low 4’s
High Balance Loans $647,201.00-$ 970,800.00 are in the low 4’s +
Jumbo loans above $970,801 are in the low 4’s +. We can do high 4’s with as little as 10% down. We can do 1-year findings on these too!
5/1, 7/1, 10/1 Arms are in the high 3’s and low 4’s! The weird market for them.
Bank statement loans – They are available with 10% down again! 4’s to low 5’s depending on down and credit score.
Stated income loans – I have one bank with 30% down, but everything else has to be perfect! Interest rates are in the high 4’s.
0 down loans are in the 4’s – 620 credit score min right now! Mid 3’s for the most part up to $670,000.00 Price.
0 down Jumbo to 1.2 Mil – 700 credit score – call for a quote
Private Money lenders – hard Money Loans – 35% down!
No Ratio Loans 30% down
Debt Service Coverage loans with as little as 25% down
Bridge Loans – are typically 4.99 – 5.99% with limited fees – But they get you where you need to go!
Interest rates are subject to change without notice! Above are LA County Loan Limits.
I will be in the office all week, so feel free to reach out if you need anything. My cell is 661-714-6258, and my office line is 661-260-2970 xt. 2222. Please text me at 661-714-6258 or email me at Mike@AugustaFinancial.com. Have a great day and a better tomorrow! Please call me when you have a client that needs to borrow!