4/27/2023 – LLPA’s with a 640-659 Credit Score

I want to touch on the LLPA fees going into effect next week with conventional loans and give you some workarounds! Granted, many of the cookie-cutter lenders out there will not think of this, but I am always looking out for our clients! A 640-659 credit score has the largest discrepancy regarding down payment vs. credit score.

Buyer Bob is looking to buy a house for $750,000.00, and he is still determining how much he wants to put down! He has a 640 credit score. Below are his options based on his different credit scores and down payments, and please don’t laugh!

$750K Purchase Price - 25% down – 6.490% – $562,500.00 Loan Amount – $3551.68 + Taxes and Insurance

$750K Purchase Price - 20% down – 6.875% – $600,000.00 Loan Amount – $3941.57 + Taxes and Insurance

$750K Purchase Price - 15% down – 6.990% – $637,500.00 Loan Amount – $4237.02 + PMI $180.63 = $4417.65 + Taxes and Insurance

$750K Purchase Price - 10% down – 6.625% – $675,000.00 Loan Amount – $4322.10 + PMI $410.60 = $4732.70 + Taxes and Insurance

$750K Purchase Price - 5% down – 6.625% – $712,500.00 Loan Amount – $4562.22 + PMI $611.56 = $5173.78 + Taxes and Insurance

$750K Purchase Price - 3% down – 6.490% – $726,200.00 Loan Amount – $4585.30 + PMI $816.97 = $5402.27 + Taxes and Insurance

FHA

$750K Purchase Price - 25% down – 5.500% – $562,500.00 Loan Amount – $3249.70 + PMI $234.38 = 3484.08 + Taxes and Insurance

$750K Purchase Price - 20% down – 5.500% – $600,000.00 Loan Amount – $3466.35 + PMI $250.00 = $3716.35 + Taxes and Insurance

$750K Purchase Price - 15% down – 5.500% – $637,500.00 Loan Amount – $3685.00 + PMI $265.63 = $3948.63 + Taxes and Insurance

$750K Purchase Price - 10% down – 5.500% – $675,000.00 Loan Amount – $3899.65 + PMI $281.12 = $4180.77 + Taxes and Insurance

$750K Purchase Price - 5% down – 5.500% – $712,500.00 Loan Amount – $4116.29 + PMI $296.88 = $4413.17 + Taxes and Insurance

$750K Purchase Price - 3.5% down – 5.500% – $723,750.00 Loan Amount – $4181.20 + PMI $331.72 = $4512.92 + Taxes and Insurance

Remember that you can get the 3% down loan and immediately pay it down to 78% of the original purchase price, get rid of the PMI, and re-forecast your payment when you put down 22%. FHA makes more sense than a conventional loan does in most of the above.

FHA PMI is required for the life of the loan unless you put down 10% or more. The PMI will stay with the loan for 11 years. Remember that FHA has the Upfront Mortgage Insurance Premium of 1.75%, so we must review these scenarios closely!

Next Tuesday, I will compare 740 credit scores with 3% to 25% down. The wise man once said, “None of this shit makes any sense!” Again I go back to what a Mom would do, and they would make it fair, and this seems 100% unfair and should not move the bar at all for 95% of the buyers in this credit score area!

Interest rates went up slightly yesterday and are moving up again today. Not a big movement, but there has been some movement.

• 12-day escrows if your buyer is pre-approved - Conventional / FHA / Jumbo / Bridge
• 0 down California Dream for all Equity Share – Postponed until 2024!
• 3/2/1 Buydowns 2/1 Buydowns and 1/0 Buydowns are available at great start rates!
• Government Loans (FHA / VA) are in the low to mid 5’s.
• Conventional Loans up to $726,200.00 are in the mid 5’s to low 6’s.
• High Balance Loans $726,201.00-$ 1,089,300.00 are in the high 5’s and low 6’s
• Jumbo loans above $1,089,300 are in the low to mid 6’s
• 5/1, 7/1, 10/1 Arms are in the 5’s and 6’s.
• Bank statement loans - They are available with 10% down again! 7’s + depending on down and credit score.
• Stated income loans – 20% down with reserves! In the 8’s and 9’s!
• 0 down loans are in the high 5’s to low 6’s- 620 credit score min right now! Low 6’s, for the most part, up to $725,000.00.
• 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 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 am around all weekend 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!