October 11, 2022

I hope you are doing well, and I hope you are having a happy and healthy week so far. Did you hear that the Rams are in the Super Bowl? LOL!

I have not written about Bridge Loans in quite a while. Although most of you know what they are and do, but do you know everything a Bridge Loan does? We will test your “Bridge Loan” knowledge, and if you pass the test, you will likely send all of your clients our way because it is the more accessible and more intelligent thing to do.

Bridge Loans are mainly used to get a buyer who has not yet sold their house to access the equity in their departing residence without selling so that they can move up, out, down, or sideways. It is a tool to get you from home A to home A+, and buyers often don’t even need the Bridge Loan when they sell before they buy. Below are some other things that you need to know about Bridge loans:

• We can finance the departing residence to approximately 75% of the appraised value, less any other mortgages.
• Fees are $3500.00 on a Bridge Loan, assuming your client is getting a takeout loan from us that is larger than the Bridge Loan. If they get their takeout financing elsewhere, we charge 2 points for the Bridge Loan.
• Rates start at 7.49%, at this time, and the payment is generally interest only. Bridge Loans are 6-11 months.
• We can pre-fund a portion of the Bridge Loan early in a transaction so your client can give an earnest money deposit. We will do this even if your client is buying contingent, and we do this at no extra cost or cost if there is no Bridge Loan involved.
• Bridge Loans start at about $40,000.00 (we will go lower if needed), and there is no loan limit.

Then there is our mini Bridge or quickie private loans, which are an excellent tool for your clients. These are still along the lines of a Bridge Loan, but for smaller amounts and not necessarily being used to purchase the new house, but it gets them to the point where they can sell and buy. Below are some of the advantages of a Mini Bridge Loan:

• We will not need a full escrow and Title report as the money is not for the purchase.
• We can loan a buyer 20-30-40-50K ish, assuming they have the proper equity
• We can consolidate seller/buyers credit cards and improve their credit scores before they buy
• Buyers can use the money to make home improvements
• We can loan money to the buyer for their earnest money deposit

Mini Bridge loans are an excellent tool as we have many clients who want to fix their place up and then sell. We will loan them the money after signing the listing agreement with their agent. This way, we know they will get started on making the improvements to their credit or house, and we like to push them along, so this happens in 30-60 days, so we get them moving. The goal is to put clients in a better position to buy vs. where they are now.

Here is something else that I think is very important. When is the payment due?
So let’s say our offer is accepted next weekend, and we open escrow on October 17. We will close on November 20, and the first payment on the new house will be due January 1, and it will not be late until January 16. So if you price their sale house correctly, they will sell and close long before January 1! This is another incentive for you as an agent to push a Bridge loan because it takes greed out of the list price.

Please let me know if you have any questions about this.

Rates would be fantastic if this were 1989. rates are at the top here, but I feel there is light at the end of the tunnel. We have CPI and PPI coming out this week, and if all goes well, rates could be lower soon!

• 30-year Government Loans (FHA / VA) is in the 6’s.
• Conventional Loans up to $715,000.00 - 6’s and 7's
• High Balance Loans $715,001.00-$ 1,072,500.00 are in the 6’s and 7's
• Jumbo loans above $1,072,500 are in the 6’s and 7'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 – I have one bank with 30% down, but everything else has to be perfect! Interest rates are in the high 7’s - low 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 $735,000.00.
• 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 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!