I hope you are having a great week so far, and please be safe over the 4th of July weekend.
Many great products are hitting the market again that are helping our buyers save money at the start of the loan process. Here is an oldie but goodie for people looking to buy with a conforming or conforming high balance loan and want a 30-year fixed rate. The conforming loan limit in Los Angeles County is $647,200.00, and the High Balance limit is $970,800.00.
So let’s say we have a buyer buying an $800,000 property, and they don’t like today’s 30-year fixed rate at 5.500%. The seller wants to sell their house, and the buyer likes it and feels that rates will go down in a couple of years. As we know, getting into a property is usually the most challenging part, but if we do a 2/1 buydown and we get the seller to kick in a few bucks, we can start the buyer at 3.625% for 12 months, then 4.625% for 12 months and then 5.625% for the remaining 28 years. But wait, there is more!!! I said wait, and I will get to that when I get there. LOL!
Doing a 2/1 buydown would put their PITI payment at $3,852.00 in the first year, $4,223.00 in year 2, and $4,617.00 for the final 28 years. The cost to do this would be $13,920.00 paid by the seller, and I said there was more.
The more is, if your buyer refinances or sells within the first two years, they will get a refund of the unused portion of the $13,920.00 buydown money. I could go into detail on this, but every situation will differ.
Yes, they could buy the rate down from 5.5 – 5% for the exact cost, and that payment would be $4,369.00 for all 30 years. Both are sexy and with rates down to the mid 5’s again, this market is ready to take off! Please?
As you can see above, interest rates have had a couple of good days in a row, and I am starting to get a little excited. We need about 47 more days like today to get back in the 3’s!
30-year Government Loans (FHA / VA) are in the high 4’s and low 5’s
Conventional Loans up to $647,200.00 – mid 5’s
High Balance Loans $647,201.00-$ 970,800.00 are in the high 5’s and low 6’s
Jumbo loans above $970,801 are in the high 5’s and low 6’s.
5/1, 7/1, 10/1 Arms are in the 4’s for over $647,201. Under that, don’t bother right now!
Bank statement loans – They are available with 10% down again! 7’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 6’s.
0 down loans are in the 5’s – 620 credit score min right now! Mid 6’s, for the most part, up to $670,000.00 Price.
0 down Jumbo to $975,000.00 – 680 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 6.49 – 6.99% 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 around all weekend if you have any questions or if someone interested in buying a property! Yes, I will answer the phone on the 4th of July too! 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!