January 10, 2023 – Buydowns

I told you I would update you on different programs, and although we have been talking about Buydown loans for the past six months, I am now getting a lot of questions about 3/2/1 Buydowns. Yes, we do them, and all buydown loans work the same.
Assuming rates are 5.99% today:

• 3/2/1 Buydown is a cost of about 4.250 Points. Start rate 2.99% year 1; 3.99% year 2; 4.99% year 3; 5.99% year 4-30
• 2/1 Buydown is a cost of 2.125 points. Start rate 3.99% year 1; 4.99% year 2; 5.99% year 3-30
• 1/0 Buydown is a cost of .75 points. Start rate 4.99%; 5.99% year 2-30

The points are paid on the loan amount, not the purchase price.

You can do a buydown on Conventional, FHA, and VA Loans. Jumbo Loans are case by case! If the buyer refinances or sells, the bank will refund the remaining money paid towards the Buydown! The buyer qualifies at the note rate. People like these loans because they can get in with a great rate now and hope to refinance when rates come back down. A buyer paying points to buy down an interest rate will not get the rate this low and will not get a credit if rates drop, and they refinance.

Interest rates are up a tad today, but they were better on Friday and pretty flat yesterday! The trend looks good, but we are not out of the woods yet!

• Government Loans (FHA / VA) is in the 5’s.
• Conventional Loans up to $726,200.00 - in the high 5’s, and low 6’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 low 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 is 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!