11/22/24 – Non Warrantable Condo Loophole!

Non-warrantable condos in the Santa Clarita and San Fernando Valleys have been a growing challenge for buyers. With a hefty 10% down payment requirement and interest rates soaring as high as 9.50%, affordability has become a serious issue.

If you’ve been looking for a solution, we’ve got exciting news: there’s a better way to finance these properties!

We’ve partnered with a lender to bring you a first and second mortgage combo. This creative approach lowers the interest rate on the primary Loan and reduces overall payments, making homeownership far more attainable.

The Power of the 80/10/10

Remember the 80/10/10 loans that were popular 17 years ago? They’re back, and they’re saving buyers thousands! Here’s how it works:

• First Mortgage: Covers 80% of the purchase price at 7.375% interest.
• Second Mortgage: Covers 10% of the purchase price at 9.925% interest (fixed for 20 years).
• Down Payment: You put down the remaining 10%.

Let’s look at an example to see the impact:

Scenario: $700,000 Non-Warrantable Condo

Traditional 10% Loan – $630,000 – 9.50% – Principal and Interest = $5,297.38

First Mortgage (80%) – $560,000 – 7.375% – $3,867.78

Second Mortgage (10%) – $70,000 -9.925% – $672.04

Total Payment (Combo) – $4,539.82

Savings: $757.56/month or $9090.72/year!

Pay It Off Faster

Want to save even more? By adding extra payments on the second mortgage, you can pay it off early and slash your interest costs:

• Add $100/month: Pay off in 14.02 years.
• Add $200/month: Pay off in 11.03 years.
• Add $300/month: Pay off in 9.16 years, and you’re still saving $457/month compared to the traditional Loan!

The Blended Interest Rate? Just 7.657%!

This blended rate is better than rates for 15% down loans on non-warrantable condos - but with only 10% down!

Bonus: We can also structure this with 15% down if you prefer, and the rate on the second will be 9.00%, and the blended rate is 7.436%. Call me for details as this is already too long! LOL!

No PMI = Even More Savings

That’s right - there’s no PMI on our non-warrantable condo loans, even with less than 20% down. Whether you’re using the 80/10/10 or another option, you’ll enjoy significant savings compared to traditional loans with private mortgage insurance.

Interest Rates

Rates have been flat over the past week, and we need some direction! Let’s hope we start to see some movement to the downside soon!

Other Loan Highlights

We offer creative financing solutions tailored to your needs:

• Government Loans (FHA/VA/USDA): Rates in the 6% range.
• Conventional Loans up to $766,550: Rates in the 6’s.
• High Balance Loans ($766,550.01 - $1,149,825): Rates in the 6’s to 7’s.
• Jumbo Loans above $1,149,825: Rates in the 6’s to 7’s.
• Bank Statement Loans: Available with as little as 10% down. Larger down payments are in the 7’s +
• Bridge Loans: Typically 7.99% with limited fees. This blows the doors of the competition!
• No Income Qualifier Loans: 40% down with reserves, rates in the 8% range.
• Debt Service Coverage Ratio (DSCR) Loans: As little as 15% down.
• 0 down loans are in the high 6’s: 620 credit score min right now, up to $1,191,000.00.
• Private Money lenders: Hard Money Loans – 35% down!
• Profit and Loss Statement loans: 20% down – You don’t need bank statements, just a profit and loss statement!
• 3/2/1 Buydowns 2/1 Buydowns and 1/0 Buydowns: are available at great start rates!

All rates are subject to change without notice. Contact me for the latest updates.

Updates on Non-Warrantable Condos

Good News: Most condos remain eligible for financing.

Bad News: Unfortunately, Stratford Condos in Stevenson Ranch have been moved to the “naughty list” due to insufficient insurance.

For the most up-to-date list of non-warrantable condos, visit MikeMeena.com.

Let’s Talk!

I’m available 24/7 to answer your questions or help your clients secure financing. Give me a call or send me a text anytime!

• Cell: 661-714-6258
• Text: 661-714-6258
• Office: 661-260-2970 ext. 2222
• Direct Line: 661-291-2222
• Email: Mike@AugustaFinancial.com

Let’s get your clients into the home of their dreams - creatively and affordably!