December 21, 2022

December 21, 2022

President | Loan Officer
Mike Meena
Published on December 21, 2022

December 21, 2022

I had an interesting conversation at lunch yesterday about doing a “Wrap Around Mortgages” on a property, which keeps the current loan in place when the house sells. The buyer comes in with cash for the rest of the money, or they get a second mortgage for the difference, or the seller carries a 2nd mortgage for the difference.

I have heard this quite a few times, which is a bad idea for all parties involved. Yes, sellers are sitting with a 2.5% +/- interest rate, and that payment is tasty sweet, and if your buyer can take assume that loan, then great! If not, don’t get caught up in a scam where you would have a buyer buy on a “Wrap Around Mortgage!” Oh, so you want reasons for why? Here is why!!!

  1. Conventional Fixed rate mortgages were assumable in the 1970s but are not anymore! The loan could be called due and payable at any point by the lender! Do you want to be involved in that nightmare? It sounds like a complete mess to me!
  2. If the seller collects the payments and forwards those to the lender, they may pocket the payments and not pay them!
  3. If the seller wants to buy another house and is making payments, then their debt-to-income ratios could be hit for the payments on the property they departed, even though they no longer own that property.
  4. In many cases, the seller will carry a second mortgage. If the buyer doesn’t pay and you suggest that they carry, that again becomes a liability to all parties involved.
  5. The complications of an institutional 2nd will be fun as they will question if the first mortgage will be called due, and they may want to qualify for the mortgage based on current market rates.

Interest rates have struggled the past few days since the Federal reserve raised rates. Most of the issues are from foreign markets, and because the Fed claims they will not be lowering rates in 2023. We will see about that!

  1. 30-year Government Loans (FHA / VA) is in the 5’s.
  2. Conventional Loans up to $726,200.00 - in the high 5’s, and low 6’s.
  3. High Balance Loans $726,201.00-$ 1,089,300.00 are in the high 5’s and low to mid 6’s
  4. Jumbo loans above $1,089,300 are in the low 6’s
  5. 5/1, 7/1, 10/1 Arms are in the 5’s
  6. Bank statement loans - They are available with 10% down again! 7’s + depending on down and credit score.
  7. Stated income loans – I have one bank with 30% down, but everything else has to be perfect! Interest rates are in the 8’s.
  8. 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.
  9. Private Money lenders - hard Money Loans – 35% down!
  10. No Ratio Loans 30% down
  11. Debt Service Coverage loans with as little as 25% down
  12. 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 Have a great day and a better tomorrow! Please call me when you have a client that needs to borrow!

President | Loan Officer
Mike Meena President | Loan Officer
Click to Call or Text:
(661) 714-6258

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