March 21, 2023

Clients are always asking if there are incentives for first-time buyers, and there are usually a few. Still, recently, Fannie Mae decided that they would give credit to first-time buyers that get rid of some of their Loan Level Price adjustments, saving many of our first-time buyers about .250% on their interest rate, but there is a catch!!! Your family income must be below $109,320.00 in Los Angeles County. Most buyers will only qualify for approximately $550,000.00 on a mortgage with this incentive at these rates if they made exactly $109,320.00 per year! Down payment and interest rates vary, so the amount you qualify for will change too.

Fannie and Freddie have added so many Loan Level Price adjustments to their loans that we are seeing many more loans go in the direction of FHA! The difference in rate is CRAZY!!!! FHA is priced better by .750% to 1.5% in rate, depending on credit score! With the improved PMI and the lower rate, FHA is winning out, but we have to be aware of the negatives to FHA too! FHA PMI stays on loan forever if you put down less than 10%, and it stays on loan for 11 years if you put down 10% or more! FHA Charges an upfront Mortgage Insurance Premium of 1.750%! So we do the numbers, see what makes sense, and let the buyers decide. The 1.75% UFMIP is spent money if you go with an FHA loan and refinance to a conventional loan in the future. We are cautious in explaining everything to our buyers to ensure they understand, and everything reflects well on the agent who refers. We have to look at every option and show buyers the details.

Rates have struggled the first two days of this week, awaiting the Federal Reserve’s decision on short-term interest rates tomorrow. The expectation is a 250% increase, so anything other than that will move the market in a whacky way!

• We close Purchase loans in 14 DAYS or less!!! The buyer must be pre-approved before opening escrow!

• 3/2/1 Buydowns 2/1 Buydowns and 1/0 Buydowns are available at great start rates!
• Government Loans (FHA / VA) are in the mid to high 5’s.
• Conventional Loans up to $726,200.00 are in the low to mid 6’s.
• High Balance Loans $726,201.00-$ 1,089,300.00 are in the mid to high 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 and 6’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.

I am 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 ext. 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!