9/14/23 – Payment Per $1,000

I think we can all agree that interest rates will start to drop at some point next year. We have yet to determine when that will be, but I have moved my guess from the spring to the fall. With higher interest rates 7% ish, higher insurance rates, and higher prices, we have to give some good news when showing property. Inventory looks like it will be low for years and what can we tell our buyers as we head into the “slow season.”

I want to share the price per $1000 paid for a property today so you can better understand what buyers see.

0 Down VA Loan – $7.53 per $1000 property – 800K property =$6025.74

3.5% Down FHA – $7.87 per $1000 property – 800K property =$6299.78

5% Down Conventional – $7.88 per $1000 property – 800K property =$6309.52

10% Down Conventional – $7.49 per $1000 property – 800K property =$5999.34

20% Down Conventional – $6.69 per $1000 property – 800K property =$5353.64

When rates drop by 1% 

0 Down VA Loan – $6.89 per $1000 property – 800K property =$5517.63 vs. $6025.74

3.5% Down FHA – $7.25 per $1000 property – 800K property =$5800.57 vs. $6299.78

5% Down Conventional – $7.26 per $1000 property – 800K property =$5810.03 vs. $6309.52

10% Down Conventional – $6.91 per $1000 property – 800K property =$5526.14 vs. 5999.34

20% Down Conventional – $6.16 per $1000 property – 800K property =$4933.01 vs. 5353.64

When rates drop by 2% 

0 Down VA Loan – $6.29 per $1000 property – 800K property =$5035.52 vs. 5517.63 vs. $6025.74

3.5% Down FHA – $6.70 per $1000 property – 800K property =$5366.07 vs. $5800.57 vs. $6299.78

5% Down Conventional – $6.67 per $1000 property – 800K property =$5333.53 vs. $5810.03 vs. $6309.52

10% Down Conventional – $6.34 per $1000 property – 800K property =$5074.72 vs. 5526.14 vs. 5999.34

20% Down Conventional – $5.66 per $1000 property – 800K property =$4531.75 vs. 4933.01 vs. 5353.64

I know there are a lot of numbers, but when we speak with clients, we need to make sure they understand that the future looks better than today! A 4.99% interest rate may happen within 18 months, so they have to hold on, cut the budget, and then they can have fun once rates drop again!

7% seems to be the tipping point where prices stop increasing at a crazy pace, and 8% (which should not happen) is where prices may start falling. So, 9% (This better not happen) would push values down more than 8%. 6% will push prices up faster than now, and the market will go wild at 5% or below.

I hope this helps you, and please let me know if you need anything from me.

Condo / Townhome issues we know of now:

American Beauty Village – Insurance

Scenic Hills – Insurance

Mariposa – Litigation – Agreed upon, but not yet recorded

Bouquet Canyon Village – Insurance

Scenic Hills – Insurance

West Creek / West Hills – Insurance

Cornerstone – Insurance (I think they may be a few weeks away from renewal, so you may be able to sneak something in?)

Please let me know if you hear something new on Condos or Townhouses.

We will see premiums increasing, likely increasing the HOA Fees soon!

Interest rates got better yesterday, and they are trending higher today. Inflation is still around and rearing its ugly head again today! Hang in there, as the future looks bright!

• 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 low to mid 6’s.
• Conventional Loans up to $726,200.00 are in the low to mid 6’s and low 7’s.
• High Balance Loans $726,201.00-$ 1,089,300.00 are in the 6’s and 7’s
• Jumbo loans above $1,089,300 are in the 6’s and 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 6’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 7.99% with limited fees – But they get you where you need to go!
• 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!

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!