February 9, 2023

Getting a grasp on what a buyer wants to pay monthly is sometimes the difference between getting a client or losing them.

Realtors ask many questions when you meet a client, and many of those clients think they can buy a $700,000.00 house with 5% down and have a payment at $3500.00 per month, which is not the case. I get a lot of referrals with unrealistic buyer expectations of the above Payment, and we try to talk them off the ledge. You should not get involved in the mortgage process, but having more knowledge of where payments are may help us sell real estate.

I am sharing with you the current cost per $1000.00 purchase price, including Property Taxes, PMI, and Insurance.

FHA 3.5% down: the cost per $1000.00 purchase price for an FHA loan is about $7.46. A $700,000.00 Price x $7.46 = approximately $5222.00 per month.

Conventional 5% down: the cost per $1000.00 is $7.21. Total Payment is approximately $5047.00 on a $700,000.00 Purchase price – remember that you can get rid of PMI on a conventional loan.

Conventional 10% down: Cost of $6.90 cost per $1000.00 or $4830.00 on a $700,000.00 house

Conventional 20% down: Cost of $6.27 cost per $1000.00 or $4389.00 on a $700,000.00 house

VA 0% down: Cost of $6.71 cost per $1000.00 or $4697.00 on a $700,000.00 house

To get the approximate payment, you must multiply the first three sales price numbers by the multiple under type of loan and then boom!  You get an approximate payment!  Even at 20%^ down $3500.00 is not a reasonable payment.

I know this has been helpful in the past, and I hope it will be beneficial today. I can speak with a client anytime, but having the info at your fingers helps!

Rates are struggling a bit today, but they were better yesterday! Nothing earth-shattering, and the trend will be down in the next few months.

• 3/2/1 Buydowns 2/1 Buydowns and 1/0 Buydowns are available at great start rates!
• Government Loans (FHA / VA) are in the low to mid 5’s.
• Conventional Loans up to $726,200.00 are in the low to high 5’s and low 6’s.
• High Balance Loans $726,201.00-$ 1,089,300.00 are in the low to mid 6’s
• Jumbo loans above $1,089,300 are in the low to 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 – 20% down with reserves! In the 8’s and 9’s!
• 0 down loans are in the high 5’s to low 6’s- 620 credit score min right now! Low 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.