August 9, 2022

I hope you had a wonderful weekend and the start of your week was as busy as mine!

It has been a rough month, as my phone doesn’t seem to ring on the weekend like it used to. It allows me to get caught up with paperwork and other stuff, but it also makes me feel like the world hates me as I like to be busy all of the time. Yes, that was my insecurity speaking loud and clear! Well, this weekend was a bit different, and I am not sure if this is part of the shift or if this is just a shift from neutral to first gear. Yes, things are tough, and rates are everywhere, so I understand the slowdown. I also see that we received 14 applications in two days for a vacant rental, and I think, hmmm.

This rental is about 1800 square feet in Valencia and gets $3750 mos. The property would sell between $750-800K. So let’s do some math using a $775,000.00 price!

At 5% down using today’s interest rates, you will have a payment of about $5100.00, including HOA… You will pay off over $900.00 in principal, and with just 3% appreciation, you will add $1937 to your monthly net worth. The net savings of buying is $1487 per month. If you refinance this property at 1% lower somewhere down the road, when the recession takes over, and inflation goes away, you will drop your payment by about $500.00 per month. If rates go down 2%, you will save $900.00 monthly! If your landlord refinances their property, they will not lower your rent! They will raise the rent annually because a rental property is a business, and they own rental properties not for you but for their financial benefit!

At 10% down at today’s interest rates, you will have a payment here at about $4800.00, including HOA… You will pay off over $850.00 in principal, and with just 3% appreciation, you will add $1937 to your monthly net worth. The net savings of buying is $1737 per month. If you refinance this property at 1% lower somewhere down the road, when the recession takes over, and inflation goes away, you will drop your payment by about $425.00 per month. If rates go down 2%, you will save $800.00 per month!

I know it is tough to see the forest through the trees sometimes. Still, you don’t have to get hit in the face with a limb too many times to see that renting is still not the way to go! 5 years from now, your rental will cost over $4300.00 per month, and your worst-case MORTGAGE payment will still be close to what it is today, and you will be paying more principal. Send your on-the-fence buyers my way, and I will help get them off the fence!

Interest rates were very shaky last week, and this week is no different!

We got hammered on Tuesday and Friday and came back nicely on Wednesday and Monday, and we are losing ground again today, although we are improving from earlier today.

• 30-year Government Loans (FHA / VA) are in the low to mid 4’s or high 3’s if you wanna pay a few points. LOL!
• Conventional Loans up to $647,200.00 - Mid 4 to low 5’s.
• High Balance Loans $647,201.00-$ 970,800.00 are in the high 4’s to low 5’s
• Jumbo loans above $970,801 are in the high 4’s to low 5’s
• 5/1, 7/1, 10/1 Arms are in the low 4’s to low 5’s for over $647,201. Under that, don’t bother right now!
• Bank statement loans - They are available with 10% down again! 6’s + depending on down and credit score.
• Stated income loans – I have one bank with 30% down, but everything else has to be perfect! Interest rates are in the high 6’s.
• 0 down loans are in the 5’s – 620 credit score min right now! Mid 6’s, for the most part, up to $670,000.00.
• 0 down Jumbo to $975,000.00 – 680 credit score – call for a quote
• 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 will be around all weekend if you have any questions or if someone interested in buying a property! My cell is 661-714-6258, and my office line is 661-260-2970 xt. 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!