8/1/24 – Interest Rates and Buydowns Interest rates have been creeping down lately, and now the economy is showing more signs of weakness, which may help push rates even lower. The Federal Reserve met yesterday, and due to the economy’s weakness, three rate cuts may still be on the table to end the year. Turn the page to today, and jobless claims data were the highest in a year! Right after that, the ISM Manufacturing numbers came in weaker than expected. All of the above is good news for interest rates, but rates will not go down in a straight line. We are seeing low 6s on conventional loans and high 5s on government loans, which looks pretty good. Looking at rate sheets, interest rates are kind of a mess. many of the lenders are not encouraging a buyer to get a 0 point loan because they still feel that rates will come down further, and they hate early payoffs! Some loan programs will have a .50% rate difference to buy a point down on a mortgage and the norm is usually .25% and sometimes .375%. Here is the easier way to look at it: I am buying a house for $1,000,000 with a $500,000 Loan Amount with a 30-year mortgage. My rate today is 6.375% with no points vs. 6.00% with 1 point. Now, I have to calculate how long I will have that loan. My savings with one point are $122 per month, and the cost is $5000, which is a 41-month breakeven! If I get a 15-year mortgage, my rate with 1 point is 5.375%, and my rate with 0 points is 6.00%. My savings are $166 monthly, and my breakeven is 30 months. I believe a client will refinance in the next two years, so I suggest they take out a 0-point loan. If they have lower credit scores or a lower down payment, then the margin difference between 0 points and 1 point will be even bigger! Just a little math fun and I love going over these scenarios with buyers as they need to see all of the options. Our Real Estate Roadmap for the new Buyer/Broker agreement and upcoming changes on Wednesday, August 7th is sold out! It is free, but we had over 125 RSVPs, and the goal was 110! Sorry, and I am sure we will get you to the next one. I am available all weekend if you need anything. Let me know 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. My direct line is 661-291-2222. When you text me, please text (661-714-6258) or email me at Mike@AugustaFinancial.com. But wait, there’s more! Interest rates are better again today, and hopefully getting better! 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/ USDA) are in the high 5’s and low 6’s Conventional Loans up to $766,550.00 are in low to mid 6’s High Balance Loans $766,550.01 – $ 1,149,825.00 are mid to high 6’s Jumbo loans above $1,149,625 are in high 6’s Bank statement loans - They are available with 10% down again! 7’s to 9’s depending on down and credit score. Profit and Loss Statement loans- You don’t need bank statements, just a profit and loss statement! No income qualifier – 40% down with reserves! In the 8’s! 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! No Ratio Loans 30% down DSCR – Debt Service Coverage loans with as little as 15% down Bridge Loans - typically 7.99% with limited fees – and they get you where you need to go! 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! The above are LA County Loan Limits. Condo Update? Bella Ventana – has a $50,000 deductible per unit and is now non-warrantable. Cimmaron Oaks is now naughty! Insurance! We are sending this to our lenient investor to see if we can get it through! Condo / Townhome – issues we know of now. Properties can be financed with 10% down and are considered NON-WARRANTABLE: American Beauty Condos - The brown ones - Insurance: 50 Million in coverage for 748 units is not nearly enough! American Beauty Gardens: 19% delinquency on special assessments due. 19% are 60 days or more late! We can do with 5% down, but others can’t! American Beauty Village: On Fannie’s List. Per Fannie, this project needs critical repairs and may have conditions such as material deficiencies and significant deferred maintenance. This project’s master insurance policy deductible exceeds the allowable limit. Bella Ventana – has a $50,000 deductible per unit and is now non-warrantable. Bouquet Canyon Village is on Fannie’s list! Per Fannie – This project’s master insurance policy coverage does not meet the requirements. Bridgewater, Emeryville - On Fannie’s list! Brookside Walk – Insurance – Cabrini Villas, Burbank - On Fannie’s list! Calla and Rowan – 27513 Illumination – Fannie Mae Approval expired – New Construction. See Blog on 5/7/2024 Cameo Woods HOA - Per the litigation disclosure, the association is being sued by a homeowner for water heater damage and discrimination, and the damage is still ongoing. We received confirmation that the HOA’s insurance agency is not covering the lawsuit, and the claim was denied due to the nature of the complaint. Canyon Village – Reserves and 10% of the dues not going to reserves! Canyon Oaks – Insurance On Fannie’s list! Casa Marabella – 13951 Sherman Way, Van Nuys -On Fannie’s list! Cassia and Jasmine – 26949 Winding Trail Court – Fannie Mae Approval Expired. See Blog on 5/7/2024 Cimmaron Oaks – Castaic – Insurance is too low! Cornerstone – Insurance -On Fannie’s list! Creekside – ??? We don’t know Encino Oaks – 5460 White Oak Ave – On Fannie’s list! Heather Ridge – Deductible too high! not enough insurance – Fannie Naughty List! Lantana at Valencia – 27034 Hummingbird Lane – Fannie Mae Approval – expired. See Blog on 5/7/2024 Liberty Canyon HOA – 27409 Country Glen Road, Agoura Hills, CA- On Fannie’s list! Madison at Towne Center – Litigation – We can do with 5% down, but others can’t! Mariposa: On Fannies List. Per Fannie Mae – This project’s master insurance policy coverage does not meet the requirements. Orchid at Valencia – 27033 Open Sky Place – Fannie Mae Approval Expired. See Blog on 5/7/2024 Penn Court HOA – 4201 Pennsylvania Ave La Crescenta On Fannie’s list! Princessa Estates – has $8200 in Reserves, and they are voting on an assessment in May! Rainbow Sierra Terrace – On Fannie’s Naughty List – This project’s master insurance policy is not written to Replacement Cost Value. See Selling Guide Sec. B7-3-03, Master Property Insurance Requirements for Project Developments. Scenic Hills – Insurance – On Fannie’s list! This project’s master insurance policy coverage does not meet the requirements in Selling Guide Sec. B7-3-03, Master Property Insurance Requirements for Project Developments. Shadow Ridge – Oak Park – Insurance -On Fannie’s list! Sherman Way Condos – 17900 Sherman Way Reseda – On Fannie’s list! The District Community Association – 19533 Cardigan Dr, Northridge – On Fannie’s list! Treana - Stevenson Ranch: On Fannie’s list! Per Fannie, this project needs critical repairs and may have conditions such as material deficiencies and significant deferred maintenance. Valle Di Oro is on Fannie’s list! Per Fannie Mae, this project contains timeshare, fractional, segmented, or split ownership units or other arrangements (such as mandatory rental pooling, shared interest apartments, or community apartments) restricting the unit owner’s ability to occupy the unit. Vista Del Canon – Insurance is too low, UGH! Village Park Condo – It’s over the max deductible with that 50k per unit. Walnut Gardens II – 7320 Lennox Ave Van Nuys CA – On Fannie’s list! Warner Center Condos – 5515 Canoga Ave, Woodland Hills, CA – On Fannie’s list! West Creek Condos and Townhomes: On Fannie’s List. Per Fannie, this project’s master insurance policy coverage does not meet the requirements in the Selling Guide! Please let me know if you hear anything new on condos or townhouses. I am still available all weekend if you need anything. Let me know 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. My direct line is 661-291-2222. When you text me, please text (661-714-6258) or email me at Mike@AugustaFinancial.com. Have a great day and an even better tomorrow! Please call me when you have a client who needs to borrow! Mike Meena President | Loan Officer Click to Call or Text: (661) 714-6258 This entry has 0 replies Comments are closed.