Mike’s Mid-Day Mortgage Update – Writing a Contract from a Lenders Perspective

I hope everyone is doing well. Today’s blog will start with a quick lending tip and then move into a longer message that’s been on my mind.

From a lender’s perspective, a few things can sometimes complicate or slow down a transaction if they are written into the contract unnecessarily.

The first one is termite work. If the buyer is already paying for termite treatment, I usually prefer not to include that as a condition of clearance in the contract. The reason is simple. If it is written in, it almost always triggers a requirement for a full termite clearance report. If it is not written in, nobody asks for it unless it is a VA loan. If it does come up later, it can always be addressed or waived at the end if appropriate.

The second item is a well certification. If a property is on a well, the appraiser will identify that during the appraisal process. Once that happens, a well certification is required anyway, whether it is written into the contract or not. Writing it in early can add unnecessary timing pressure when it will likely be addressed as part of the normal loan process.

The third one is a septic certification. We do not need a septic certification upfront, which can sometimes delay closing, especially if we already know the septic may need work or if inspection scheduling becomes difficult.

Here are a few additional contract items that can also cause issues from the lending side.

Another item is occupancy language. If there is a rent back we need it to be for 60 days or less. I don’t care if there is another agreement after that, I don’t know about! LOL!  

Another item that sometimes creates surprises is personal property. If too much personal property is included in the sale, such as furniture or large items, it can raise questions during appraisal since lenders are technically financing real property, not personal items. You can say they have no value and that works most of the time, unless you say something like that is a Versace sofa the seller paid $29,000 for 6 months ago.  

I am not suggesting that this is how every contract should be written. Every brokerage and agent has their own practices and policies. From the loan side, keeping these items flexible can help the transaction move more smoothly.

As always, please refer to your broker or brokerage guidelines for how they want contracts written in these situations.

Now shifting gears, a little.

Do you ever feel like everything around you is just turning into noise?

Sometimes it feels like everywhere we turn, there is another headline, another problem, another reason for people to be frustrated or worried.

War somewhere in the world. Overspending in government. Rising gas prices. Higher Insurance. Utility bills are going up. Immigration debates. The billionaire tax is forcing people out and taking jobs with them. Housing challenges. No permits for Fire victims.

And on top of all that, every one of us is dealing with our own personal challenges, responsibilities, and pressures.

Sometimes it can start to feel like a lot.

Most of the time I try to laugh, put all that noise in a jar, and not let it affect me. But lately, even I have noticed more noise than ever, and I am not the only one.

But here is the truth.

Most of that noise does not actually control our lives unless we allow it to.

What really matters is much closer to home.

• Your spouse or significant other.
• Your kids.
• Your family and extended family.
• Your friends.

Having a roof over your head. Food on the table. A safe car that gets you where you need to go. A nest egg that helps you get through tougher times.
The phone is an amazing tool, but it also never leaves us alone. Everywhere we turn, there is more information, more opinions, and more negativity fighting for our attention.

So here is the challenge.
Shut out the noise.
Focus on what actually matters in your life.
Write down your goals.
Decide what kind of life you want.
Then go to work achieving it.
The outside world will always have chaos. It always has.
But the people who succeed are the ones who stay focused on what they can control and keep moving forward anyway.
Take care of the people you love.
Protect what matters most.
Stay focused on your goals.
Everything else is just noise.

Please let me know if you have any questions or if you or any of your clients, friends, or family members need my guidance. I’m just a call, text, or email away.

📞 Direct Line: 661-291-2222 – Text OK

📞 Cell: 661-714-6258 – Text OK

📞 Office: 661-260-2970 ext. 2222 – Text OK

📧 Email: Mike@AugustaFinancial.com

But wait, there’s more…
Interest Rates
Still struggling with rates this week! Rates could be back to 3-year lows tomorrow, or they could take 3 more years to surpass Friday’s 3-year lows!        

Loan Programs

• We do loans on Non-warrantable condos!  
• We offer 12-day escrows for pre-approved buyers, including conventional, FHA/Jumbo/Bridge loans.
• We provide loans in all 50 states, so call me with anything you need.
• Government loans (FHA/VA/USDA) are in the 5s.
• Conventional loans up to $832,750 are in the mid to high 5’s.
• High-balance loans from $832,751 to $1,249,125 are also in the high 5 and 6s.
• Jumbo loans above $1,249,125 are in the high 5’s and 6’s.
• ARMS in the 5’s and some in the 6’s
• Bank statement loans are available again with 10% down, with larger down payments in the 6’s++.
• Profit and Loss Statement loans require 20% down - no bank statements needed, only a profit and loss statement!
• 0 down loans are available in the high 6s, with a minimum credit score of 620, up to $1,325,000.
• Private Money lenders offer Hard Money Loans with 35% down.
• No-Ratio Loans require a 30% down payment.
• DSCR (Debt Service Coverage Ratio) loans are available with as little as 15% down.
• Bridge Loans typically have an interest rate of 7.99% with limited fees, helping you get where you need to go!
• 3/2/1 Buydowns, 2/1 Buydowns, and 1/0 Buydowns are available at great starting rates!

Please note that interest rates are subject to change without notice, and the information above reflects LA County Loan Limits.

**Good News for Condos:**   

Nada today!  

**Bad News for Condos***     

Moorpark Terrace: 13543 Magnolia Blvd – Deferred maintenance / Critical repairs

Las Ventanas: Balcony Issues!  

Diamond Head: We have some concerns over there. Per Fannie Mae, certain parts of the complex are approved, while other parts have outstanding critical repairs.  

Buenaventura Gardens: Restriction 22 – Portions of the project have outstanding critical repairs. Lender to review the CPM comments for more details.  

CONDO HELP!!!

If you have a listing or a buyer interested in a specific condo and are unsure whether it is warrantable or Non-warrantable, please call me, and we can look up Fannie’s list in real-time. We don’t know when something has changed, and it would be impossible to track everything day by day, but we don’t mind looking up a few items each day.  

The full state of California’s naughty list has been added to:

MikeMeena.com! See the link below:

https://mikemeena.com/non-warrantable-condos/

Let me know if you hear anything new about condos or townhouses. 

I am available every day if you need anything.    

📞 Direct Line: 661-291-2222 – Text OK

📞 Cell: 661-714-6258 – Text OK

📞 Office: 661-260-2970 ext. 2222 – Text OK

📧 Email: Mike@AugustaFinancial.com

Have a great day and an even better tomorrow! Please call me when you have a client who needs to borrow!

Sincerely,