February 24, 2022

I hope you are having a great day, and I am sure you are enjoying this bone-chilling California Winter. You could be in Austin, where the high is 37 today, or Nashville, where they will peak out at 51 today and 39 tomorrow, so I am not complaining!

I listen to younger people speak, and I think I will try to use young people's words in my update. So please let me know if you like this new style, and I will try to write this way more often.

I spoke with this lit client yesterday, and they were approved by another salty-like lender trying to push them into an FHA Loan. I was like, this is dope that they wanna speak with me, so I chilled with them on the landline, and we rapped out for a while. OK, I can't do this anymore, I am 56 years old, and this is hard work! I explained to this lovely young couple that an FHA loan was not in their best interest because they have a 740+ credit score and have money to put down, and a 5% down loan was the way to go! Also, when you have a loan amount above $625,500.00, FHA increases the PMI monthly rate from .85 to 1.05? So on a $700,000.00 Loan amount, you are paying a PMI of $613.00 per month! The PMI on a Conventional Loan with 5% down and a 740 credit score is $169.16 per month. So below is a complete breakdown, and you can see the big difference between FHA and Conventional. Plus, there is also a way to do 5% down on a conventional loan and get a 1% credit for closing costs with a higher rate, so you are effectively only putting 4% down + the remaining closing costs.
$725,000 Purchase Price - 3.5% down FHA - Loan Amount $699,625.00 + Upfront Mortgage Insurance 1.75% = 711,868.00 - 3.75% = $3296.77 + Taxes $755.00 + Insurance $125.00 + PMI 612.19 = $4788.96
$725,000 Purchase Price - 5% down Conventional - Loan Amount $688,750.00 + Upfront Mortgage Insurance 0 - 4.375% = $3438.83 + Taxes $755.00 + Insurance $125.00 + PMI 166.45 = $4485.28
$725,000 Purchase Price - 5% down Conventional - Loan Amount $688,750.00 + Upfront Mortgage Insurance 0 - 4.625% = $3541.14 + Taxes $755.00 + Insurance $125.00 + PMI 166.45 = $4587.59 (this one has a 1% credit $6887.50 and the buyer can use that for closing costs and the effective down is 4%)
By the way, PMI can go away on a conventional loan, and it will stay on the FHA loan for the life of the loan. FHA makes sense with lower credit scores, but it NEVER makes sense with higher credit scores!!! I know this is lit, dope, tight, and bad!

Interest rates got a little better today due to some stuff in Ukraine! Not sure what this means in the long term as we will see higher gas prices again, and who knows what else? Interest rates have been at this level or lower 17.5% of the time over the past 50+ years! If people think they will go down in the short term, they will miss the boat!
30-year Government Loans (FHA / VA) are in the mid to high 3's
Conventional Loans up to $647,200.00 - high 3's and low 4's
High Balance Loans $647,201.00-$ 970,800.00 are in the low 4's +
Jumbo loans above $970,801 are in the low 4's +. We can do high 4's with as little as 10% down. We can do 1-year findings on these too!
5/1, 7/1, 10/1 Arms are in the high 3's and low 4's! The weird market for them.
Bank statement loans - They are available with 10% down again! 4's to low 5'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 4's.
0 down loans are in the 4's - 620 credit score min right now! Mid 3's for the most part up to $670,000.00 Price.
0 down Jumbo to 1.2 Mil - 700 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 4.99 - 5.99% 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 need anything. 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!