He's actually not a lender I work with a lot, but he has been in our community for a very long time. Somehow I got on his email drip campaign. I scan everything he sends. Sometimes, like today, they become a blog topic!
And, since I'm using some of his info, here's my way of saying thanks!
From Mike Meena:
"Let's dive into the mysterious world of interest rates – the stuff of both financial witchcraft and nightmares. Some folks keep whispering about "buying rates down," last week, we gave Temporary Buydowns a spin. This week, we're unraveling permanent Rate Buydowns.
Imagine you're eyeing a house with a 25% down payment on a $800,000.00 home. Your credit is so good that it practically does your taxes for you, and you're not spending points like a contestant on a game show. The regular interest rate stands at approximately 7.99%. Anything lower than that is your golden ticket to the Permanent Buydown party.
Here comes the punchline: Points in the mortgage world are like that side dish you didn't order but somehow ended up on your plate. One Point equals 1% of the loan amount but is not 1% off of your interest rate. It's like expecting a piece of broccoli to taste like a chocolate truffle.
So, let's break it down with some wit:
Purchase Price: $800,000.00
Loan Amount: $600,000.00
Interest Rates (with the accompanying Points and Monthly Payments):
7.990% - 0 Points - $4,398.41
7.625% - 1 Point - $4,246.76
7.250% - 2 Points - $4,093.06
6.990% - 3 Points - $3,987.79
6.750% - 4 Points - $3,891.59
6.625% - 5 Points - $3,841.87
6.375% - 6 Points - $3,743.22
6.250% - 7 Points - $3,694.30
In the current housing market, some homes are flying off the shelves faster than discount candy on November 1st. But if your property is sitting on the market like that leftover Halloween candy, it's time for a strategy. You have two options: offer to buy down the interest rate or lower the property price.
If I were the buyer, I'd be tempted by the 2/1 Buydown like a kid in a candy store. I get a sweet 5.99% rate for the first year, a 6.99% delight in year two, and a 7.99% dessert from year three onwards. With the Permanent buydown of the same 3 points, I get the lifetime membership to the 6.99% club. Not a bad deal, right? OK, maybe not, but get used to it! LOL
If you're selling an $800,000.00 property, parting with $18,000.00 to spice things up sounds good. It's like adding extra cheese to your nachos – always a good call! If your property is sitting, you need to do something, and if you have low offers, a buydown could fill the gap!"
Such a great sense of humor, right?
We've got a 700k property that just hit the market.
Think our Seller should consider a buydown?
We shall seeeeee..... Open Houses Alllll Weekend!
25133 De Wolfe Rd in Newhall
Enjoy!
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