October 6, 2022

Monday and Tuesday had some promise on the interest rate front, and Wednesday and Thursday have now crushed our dreams of a rate recovery! It’s just another week, and the 4th quarter has started like the other three, with weakness all around.

I was talking with quite a few people that are pretty down about where their business is for this year, and it’s understandable. I don’t look at the overall Real Estate numbers, but I track what my team and our company do, and we are way off in every area. Yes, this has been a rough year, but things will get better at some point, and now is the time that you work on putting in sound systems, working out bad habits, and understanding that people need a nudge and you have to call and ask what they are thinking. We all know this, and if we don’t start now, we will get to the excuse time of the year when Thanksgiving hits, and we will have a rough first quarter too!

On a positive note, UBS did a study of 2000 people at various income levels and wealth levels and found that 44% of those people are interested in buying a home in the next 12 months. The survey resulted in an incredibly high percentage of people wanting to buy, and we don’t know how capable these people are, but it sounds like the desire is there for 44% of the country to want to buy. So what is holding them back? I assume affordability is at the top of the list! I also feel that many people don’t even know how it works. We must meet, educate, talk, show, educate again, help, and sell. We have to all do a better job with our prospecting and understand why people are not moving as they have in the past few years. Interest rates are kicking our butt, and that is not likely to change this year, but we still need to build a funnel and ask people what the number is that will move the needle.

Why would you listen to a lender giving advice? I have been through a few cycles in my 32+ years in the business, but I am living this today! My business is so slow that we are starting to do things I always wanted my team to do. I am spending more time with every client going over all of their fears and telling them why I would buy right now vs. waiting until the spring. I am spending more time showing them what their payments mean and what the actual cost of buying a home truly is. I go over appreciation, principal reduction, tax write-off, and possible interest rate reductions in the future and try to calm their fears. I believe TODAY is a better time to buy than next year! I think that too many people are just looking at the interest rate and not what they get from owning a house. I believe that the internet, texting, and email have ruined the relationships we used to have with our clients. We need to get back to the basics and teach our clients the actual reasons why they should buy.

Let’s work hard together and spend extra time with every client before the holidays. Let’s take these good work ethics and build solid relationships for the rest of this year and the rest of our lives.

Rates have come back a bit this AM after a terrible start to the day!
We are on a Rocky Road right now, and any positive movement seems to melt away quickly!

• 30-year Government Loans (FHA / VA) is in the high 5’s and low 6’s.
• Conventional Loans up to $715,000.00 - low to mid 6’s
• High Balance Loans $715,001.00-$ 1,072,500.00 are in the mid to high 6’s
• Jumbo loans above $1,072,500 are in the low to mid 6’s
• 5/1, 7/1, 10/1 Arms are in the mid to high 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 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 7.99% 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 weekend 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!