Joel Richardson Prime Lending in the ATX; TIP of the week.

Here is something we have going right now. I just sent this out to the Realtor Tip of the Week:

We can finance 95% loan to $1M—and your client doesn’t need to be a doctor?

That’s right! So, at a purchase price of about $1.052M, we can finance 95% of that (loan amount at $1M). Note: we can finance 90% up to a $1.5M loan (or a $1.667M price). We have 30yr fixed rates and three ARM choices (10yr, 7yr and 5yr).

What’s the target market for this?

Two Customer Groups:

With the average home price in Austin around $500K, many homes are now priced well north of the conventional loan range. The challenge: Many customers have the income to qualify in this price range—they simply don’t have the resources for the down payment.
Customers who don’t want to liquidate assets for their down payment.

How does this help Customer #2?

Let’s take a $1M home. 5% down payment= $50K. A 20% down payment = $200K. So, the customer keeps her $150K invested in the market. Or, even buys a rental home with it (hint, hint!!). Assume the stock market returns > the loan rate, she is better off. Also, the interest is tax deductible, so she gets a bigger tax deduction come April 15^th. At a later date, she can always choose to recast to drive the payment lower or refinance to a lower rate with the equity in the home.

Okay, what are the details, rates, etc?

The rates aren’t that bad. This morning, I quoted 6.125% on the 30yr fixed and 5.25% on the 7yr ARM.
Mortgage insurance is required. It’s not that bad though considering the loan amount. On a $950K loan, it’s just south of $200/mo.

Savvy agent tip: get the seller to contribute to closing costs and actually use that to buy out the mortgage insurance!!! On that same loan, if the seller contributes only $10K, there’d be no monthly mortgage insurance.

This product is for primary homes only
No prepayment penalties, so customer can refinance or recast later!

But do you have doctor loans?

Yes we do! The difference is that doctor loans don’t have mortgage insurance and are done via ARM loans. The key to a doctor loan is that we don’t have to count student debt against their income.