10/10/2023

I want to remind you that Oktoberfest is in 8 days! Wednesday, October 18, here at our office from 5:30-8:30. Good food, drinks, live entertainment, and dessert!

I am talking with a potential client over the weekend, and he was more than qualified to buy the house he was looking at. He kept saying, “I am not sure now is the right time.” He spoke to a “Loan Officer” at the bank who reviewed the payment and did not discuss appreciation, interest write-off, or principal paid! He also said that the payment would be half as much if rates were down to 5%, which may not be what he said, but that’s what she heard, oh and it’s not true either!

So I reviewed everything with him and showed him the “true cost of buying a home.” I explained about the lack of inventory and how higher rates have stabilized the prices, and she may be able to get a “deal” in the next few months if rates stay at these levels. I also explained that prices will start to go back up when rates go lower. He asked if I would buy now, and I told him I just bought a house last week (not a lie, it’s a flip, LOL) and I think it’s a great time to buy because the lack of inventory will be a story for 5-15 years. We have proven that interest rates are not a factor in prices rising, and if you wait, prices will increase. We discussed buydowns, too!

Yes, we all know this client well, and I had to get over the bank’s misinformation and the market conditions. Then I sent this and called and reviewed it, and now he gets it!

Hello Steve – It was nice speaking with you earlier today about purchasing a property. Per our conversation, I have placed a few options below based on today’s Interest rates:

$875,000.00 Purchase Price - 20% down payment - 30-year fixed rate – Loan Amount $700,000.00 - Principal and Interest $4716.03 / Property Taxes $911.00 / Insurance $225.00 = $5852.03 plus any HOA

When rates drop to 5.99%, you save $523.00 monthly

When rates drop to 4.99%, you save $962.00 monthly

In the above scenario, you are paying off $6941.00 in the first year of ownership, which will increase annually. You can also write off about $49,651.00, which will likely put an additional $15,888.00 back in your pocket at the end of the year on your taxes. You should check with your tax preparer for your specific scenario. Property values have increased by about 5.6% on average over the past 70 years, and if property values go up by just 4% per year, then the above Property will increase by $35,000.00 this next year. So if all of the above holds, your payment will be $5852.03 – you will pay off $578.00 – $1324.00 in a monthly tax refund, and your appreciation will be $2916.00 monthly. If all holds, the “TRUE COST” of buying the above Property is $1034.03 monthly plus any HOA fees.  

You could also ask for a seller buydown of the rate and have them buy the rate down for the first year. 30-year Fixed with 1/0 Buydown – $875,000.00 Purchase Price - $700,000.00 LOAN AMOUNT

Year 1 Payment – Principal and Interest $4253.27 / Property Taxes $911.00 / Insurance $225.00 = $5389.27

Years 2-30 Payment – Principal and Interest $4716.03 / Property Taxes $911.00 / Insurance $225.00 = $5852.03 plus any HOA

The additional cost for the buydown will be about $7000.00 paid by the seller.

Please remember that interest rates fluctuate daily, like the stock market. They could change for better or worse between now and when we can lock in your rate.

I will send you a link to our secure portal, where you can fill out and upload your information. Please let us know if you have any questions, and we look forward to working with you!

Condo / Townhome issues we know of now:

1. American Beauty Village – Insurance
2. Scenic Hills – Insurance
3. Mariposa – Litigation – Agreed upon, but not yet recorded
4. Bouquet Canyon Village – Insurance
5. Scenic Hills – Insurance
6. Madison – Litigation
7. West Creek / West Hills – Insurance
8. Cornerstone – Insurance
9. Canyon Oaks – This is new!!!

Please let me know if you hear something new on Condos or Townhouses. We will see premiums increasing, likely increasing the HOA Fees soon!

Today is a good day in the Mortgage market! Rates are down a bit, but that could change on a dime. Let’s hope it’s 4th quarter momentum and keep positive thoughts.

• 12-day escrows if your buyer is pre-approved - Conventional / FHA / Jumbo / Bridge
• We do loans in all states, so call me with anything you need.  
• Government Loans (FHA / VA) are in the high 6’s.
• Conventional Loans up to $726,200.00 are in the high low to mid 7’s.
• High Balance Loans $726,201.00-$ 1,089,300.00 are in 7’s
• Jumbo loans above $1,089,300 are in the 7’s
• Bank statement loans - They are available with 10% down again! 7’s and 8’s + depending on down and credit score.
• No income qualifier – 40% down with reserves! In the 6’s!
• 0 down loans are in the mid to high 7’s – 660 credit score min right now, up to $740,000.00.
• 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 8.25% with limited fees – But they get you where you need to go!
• 0 down California Dream for all Equity Share – Postponed until October???
• 3/2/1 Buydowns 2/1 Buydowns and 1/0 Buydowns are available at great start rates!

Interest rates are subject to change without notice! Above are LA County Loan Limits.

I am around all week if you have any questions or if someone is interested in buying a property! My cell is 661-714-6258, and my office line is 661-260-2970 ext. 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!