Mike’s Morning Mortgage Update – The Debt Reality and the Opportunity Agents Are Missing

Let's start with the numbers.

Santa Clarita ranks #1 in the nation for average household credit card debt, with households carrying roughly $21,000 - $22,000 in credit card balances on average. they are one of four California cities that are in the top 5 in the nation! That's just credit cards. Layer in:

• Car payments
• Student loans
• Rising Insurance costs
• Higher property taxes
• Cost of living in LA County

And you can see why many homeowners feel pressure, even if they don’t say it out loud.

Now here's the important part:

This is NOT 2008.

Mortgage delinquency rates today are around 1.5%. During the Great Recession? 11%+, so we are not in a foreclosure crisis. We are in a cash flow squeeze. And that squeeze is creating opportunity, if you understand how to frame it.

The Math Most Agents Aren’t Showing Clients. Every $1,000 in monthly consumer debt payments equals roughly $165,000 in mortgage buying power.

So, if someone is carrying $3,000 per month in car and credit card payments…

That’s like dragging around an invisible $495,000 mortgage. That’s the conversation.

Tom & Kathy

Tom and Kathy own an $875,000 home. They owe $625,000.

They sell and walk away with roughly $200,000 after costs.

Here's their real monthly picture:

• Mortgage at 3.5%: $4400/month
• Two car payments ($50K + $30K): $1,900/month
• $60K in credit cards: $1,400/month

Total monthly outflow:

$7,700 per month

That's what they actually feel.

The Restructure

From their $200,000 proceeds they:

• Pay off cars: $80,000
• Pay off credit cards: $60,000

Total debt eliminated: $140,000

Monthly payments eliminated: $3,300

They still have around $60K remaining.

They put 5% down on another $875,000 home, maybe the updated one next door.

New loan ≈ $831,250

Rate ≈ 5.99%

New payment ≈ $6460/month

Before vs After

Before – $7700 per month total

After – $6460 per month total

Monthly improvement:

About $1,240 per month

But that's not even the best part.

They:

• Eliminated 25% credit card interest
• Eliminated two car payments
• Consolidated everything into one structured mortgage
• Increased their mortgage interest deduction (Tax Deduction)
• Reduced stress
• Created a future refinance opportunity when rates drop which will lower their payments.
• PMI could go away in the next few years.

Before, refinancing wouldn’t fix their cars or credit cards, but this will!

Imagine the savings if they went from a 6% rate to a 6% rate! We went from a 3% to a 6%! Call me if you want to run a client scenario!   

This Is Not About Giving Up a 3% Rate

It's about restructuring a balance sheet.

It’s about turning toxic 25% debt into a structured, tax-deductible 6% debt.

It’s about freeing up cash flow.

And most importantly…

It’s about calling your past clients.

Because some of them aren’t stuck.

They’re just structured wrong.

And sometimes the move that fixes the debt problem is a move.

Simple call script

"Hey! Just checking in, how are things going? Any big plans this year?

I’ve been talking to a lot of past clients lately who are making moves because monthly expenses and debt have climbed. I just wanted to see how you’re doing and if you’re still loving the home."

But wait, there’s more…

Interest Rates

Interest rates are better again today! YAY! We had a job report yesterday that would usually send the market into a tizzy! Rates went up slightly, only to come down today after continued unemployment claims, which were less than spectacular! I am now feeling optimistic, but I still think it is day-to-day!

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:**   

None!

**Bad News for Condos***     

Princessa Estates – Balconies

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.