Mortgage Update

Mike's Morning Mortgage Update
True Cost of Homeownership Version 2018

I hope your week is going well and I hope you are getting ready for a beautiful weekend!  I know that people hesitate when they go to buy their first home and I feel it is my job to explain every unique situation to a client until they fully understand.  I also believe that it is important that we look at the past as a guide to the future.  When you buy a Mutual Fund, they give you a prospectus that shows you what the fund has done in the past.  We know that Real Estate prices have increased by over 6% per year over the past 60 years so below is the True Cost of Homeownership based on 3%, 4%, and 5% increases using FHA financing with just 3.5% down:

$500,000.00 Purchase Price - FHA 3.50% down
$482,500 Base loan amount 
$490,944 Loan amount with UFMIP
Principal and Interest $2343.84
Property Taxes $521.00
Mortgage Insurance $347.75
Insurance $80.00
Total Payment $3292.59
Principal pay down - $720.00 per month. 
Approximate Tax Refund if you are married = $57.00 mos.  Approximate tax refund per month if you are single =$357.00
Monthly Appreciation at 3% annual increase = $1250.00
Monthly Appreciation at 4% Annual Increase = $1667.00
Monthly Appreciation at 5% annual Increase = $2083.00
True cost is calculated by taking Payment $3259.59 - Principal paid $720.00- tax deduction -$57.00 (married) or $357.00 (single) - Appreciation $1250/ $1667/ or $2083 = True cost of Homeownership
True cost of owning a home = $1265.59 if you are Married with 3% appreciation
True cost of owning a home = $848.59 if you are Married with 4% appreciation
True cost of owning a home = $432.59 if you are Married with 5% appreciation
True cost of owning a home = $965.59 if you are Single with 3% appreciation
True cost of owning a home = $548.59 if you are Single with 4% appreciation
True cost of owning a home = $132.59 if you are Single with 5% appreciation
Principal paid down is long term savings.  Interest and taxes are a write off above $12,000.00 for a single buyer and above $24,000.00 for a married buyer.  This will create other opportunities to write off more in addition to the interest and property taxes such as donations, State tax, and property taxes up to $10,000.00, Child care credit and quite a few more. 
The above is based on a 4% Interest rate (5.09APR). Rates are subject to change without notice. 

$600,000.00 Purchase Price - FHA 3.50% down
$579,000.00 Base loan amount
$589,132.00 Loan amount with UFMIP
Principal and Interest $2812.61
Property Taxes $625.00
Mortgage Insurance $417.30
Insurance $100.00
Total Payment $3954.91
Principal pay down - $865.00 per month
Approximate Tax Refund if you are married = $205.00 mos.  Approximate tax refund per month if you are single =$505.00
Monthly Appreciation at 3% annual increase = $1500.00
Monthly Appreciation at 4% Annual Increase = $2000.00
Monthly Appreciation at 5% annual Increase = $2500.00
True cost is calculated by taking Payment $3954.91 - Principal paid $865.00- tax deduction -$205.00 (married) or $505.00 (single) - Appreciation $1500/ $2000/ or $2500 = True cost of Homeownership
True cost of owning a home = $1384.00 if you are Married with 3% appreciation
True cost of owning a home = $884.00 if you are Married with 4% appreciation
True cost of owning a home = $384.00 if you are Married with 5% appreciation
True cost of owning a home = $1084.00 if you are Single with 3% appreciation
True cost of owning a home = $584.00 if you are Single with 4% appreciation
True cost of owning a home = $84.00 if you are Single with 5% appreciation
Principal paid down is long term savings.  Interest and taxes are a write off above $12,000.00 for a single buyer and above $24,000.00 for a married buyer.  This will create other opportunities to write off more in addition to the interest and property taxes such as donations, State tax, and property taxes up to $10,000.00, Child care credit and quite a few more. 
The above is based on a 4% Interest rate (5.09APR). Rates are subject to change without notice. 

$700,000.00 Purchase Price - FHA 3.5% down
$675,500.00 Base loan amount  
$687,321.00 Loan amount with UFMIP
Principal and Interest $3281.38
Property Taxes $729.00
Mortgage Insurance $486.85
Insurance $100.00
Total Payment $4597.23
Principal pay down - $1008.66 per month
Approximate Tax Refund if you are married = $360.60 mos.  Approximate tax refund per month if you are single =$660.60
Monthly Appreciation at 3% annual increase = $1750.00
Monthly Appreciation at 4% Annual Increase = $2333.33
Monthly Appreciation at 5% annual Increase = $2916.67
True cost is calculated by taking Payment $4597.23 - Principal paid $1008.66- tax deduction -$360.60 (married) or $660.60 (single) - Appreciation $1750/ $2333.33/ or $2916.67 = True cost of Homeownership
True cost of owning a home = $1477.97 if you are Married with 3% appreciation
True cost of owning a home = $894.64 if you are Married with 4% appreciation
True cost of owning a home = $311.30 if you are Married with 5% appreciation
True cost of owning a home = $1177.97 if you are Single with 3% appreciation
True cost of owning a home = $594.64 if you are Single with 4% appreciation
True cost of owning a home = $11.30 if you are Single with 5% appreciation
Principal paid down is long term savings.  Interest and taxes are a write off above $12,000.00 for a single buyer and above $24,000.00 for a married buyer.  This will create other opportunities to write off more in addition to the interest and property taxes such as donations, State tax, and property taxes up to $10,000.00, Child care credit and quite a few more. 
The above is based on a 4% Interest rate (5.09APR). Rates are subject to change without notice. 
I know there are a lot of numbers above and I don't expect you to memorize anything, but the value of buying a house is there and it is screaming to first time buyers to take me and hold me for 30 years!  I will be doing more of these in the coming weeks for VA and conventional buyers.  We also have these in flyer format, or should I say we will have these in flyer format sometime next week! 
Interest rates are still rising.  These are the highest levels of the year but rates are still great!  I hope these are helpful as your buyers are looking for property:
  • 30-year fixed conventional 1st Mortgage with 20% down - 4.25% (4.310 APR). Loan amounts up to $453,100.00 = $2228.98
  • 15-year fixed conventional 1st Mortgage with 20% - 3.75% (3.851 APR). Loan amounts up to $453,100.00 = $3295.04
  • 5/1 ARM 1st Mortgage -  20% down - Fixed for 5 years and then becomes variable - 3.875% -  (3.931 APR) Loan amounts up to $453,100.00 = $2130.64
  • 7/1 ARM 1st Mortgage - 20% Fixed for 7 years and then becomes variable - 4.000% - (4.056 APR) Loan amounts up to $453,100.00 = $2163.17
  • 10/1 ARM 1st Mortgage - 20% Fixed for 10 years and then becomes variable - 4.125% - (4.184 APR) Loan amounts up to $453,100.00 = $2195.95
  • 30-year fixed 1st Mortgage FHA loan 3.50% down - 3.875% (4.897 APR). Loan amounts up to $453,100.00 = $2167.93 + $326.56 PMI = $2494.49
  • 30-year fixed 1st Mortgage VA loan 0% - 3.875% (4.033 APR). Loan amounts up to $453,100.00 = $2130.64
  • 30-year fixed 1st Mortgage Jumbo loan 20% down - 4.250% (4.263 APR). Loan amounts up to $3,000,000.00 = $14,758.20
All of the above are based on a 740 credit score.  Rates are subject to change without notice, your mileage may vary! 
I am here and ready to help your buyers get a loan.  Please feel free to call me at the office at 661-260-2970 ext.2222 or on my cell at 661-714-6258.  Have a great weekend and I hope to hear from you soon. 
 
Sincerely,
www.AugustaFinancial.com                                             www.MikeMeena.com
 
If the above box did not appear the rest of my info is below:

Mike Meena
Augusta Financial
25129 The Old Road, Suite 350, Santa Clarita, CA 91381
Phone  661-260-2970 Fax 661-554-7121
Email - Mike@AugustaFinancial.com




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