December 15, 2022

I spoke with an agent friend this AM, and he said that the buyer’s agent on his listing is giving credit for 100% of his commission, and he didn’t understand why! I told him it was likely because the buyer couldn’t source seasoned funds for that amount! By the way, he is 60 days into a 30-day escrow with a shady lender! LOL!

So how do you source and season funds, and what do you do if a client has cash?

We always ask for two months’ bank statements to show the down payment has been in the account for 60 days.

If the money has not been in the account for that long, then we need to source where it came from, and if we can’t do that, then we have more options. Remember that we need two months of bank statements at the close of escrow, so if we look at funds at the start and see we are short, we can always do a 45-60 day escrow waiting on 1-2 bank statements so we can close. I heard that this is unacceptable because of immediate gratification and all escrows need to complete NOW! So here are some other alternatives for sourcing a down.

Gift funds from a relative with sourced and seasoned down payment for 30 days. If that doesn’t work, you can get a check (no wire) from the donor bank on Conventional loans, and that will suffice with no bank statement needed!

No money in a relative’s account, but they own a house? Get a mini Bridge loan on the relative’s house and use that as a down payment! They can pay it back with cash 7-10 minutes after the escrow closes.

How do we know it is a relative that is giving a gift? We don’t check blood type or go to Ancestry.com. We trust you!!!

A realtor credit is also a good source, assuming they are related!

One more thing, I sent out money for a deposit on two escrows this week! Clients have a lot of equity in their departing residence but don’t have the earnest money deposit in their bank account. We can loan them the deposit based on the equity in their departing home.

So yesterday, the Federal Reserve raised interest rates an additional .50%! Yes, this is getting stupid and is complete overkill, but interest rates got better Tuesday and have been flat ever since. I want to tell you that inflation is gone, but I look at life through a skewed Mortgage Banking pair of glasses. The good news is rates have not gone up even though the Fed raised .50%, and we have now seen the worst of it. Let’s hope the CPI stays low and we can recover quickly without too many job losses!

• 30-year Government Loans (FHA / VA) is in the mid 5’s.
• Conventional Loans up to $726,200.00 - in the mid to high 5’s.
• High Balance Loans $726,201.00-$ 1,089,300.00 are in the high 5’s and low to mid 6’s
• Jumbo loans above $1,089,300 are in the mid 6’s
• 5/1, 7/1, 10/1 Arms are in the 5’s
• Bank statement loans - They are available with 10% down again! 7’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 8’s.
• 0 down loans are in the high 7’s to low 8’s- 620 credit score min right now! Mid 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 7.49% 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 week 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!