30 Year Fixed Rate Loan at a Cost of One Point: 3.625%*
Rates improved slightly in the face of marginally increasing unemployment claims. Once again, increasing unemployment is “negative economic news”, and this moves investors from stocks to bonds, causing rates to improve.
We recently had a buyer make an offer on a small CONDO with $470 of HOA dues. Sky-high HOA dues are not uncommon, as they seem to be climbing everywhere. The problem is that high HOA dues often make properties unaffordable for our clients.
$100 of HOA Dues translate to about $20,000 more purchasing power for a single family residence. This assumes a 4.0% rate and takes into account property taxes and insurance.
Example: A buyer qualifies for a condo with a maximum purchase price of $320,000 if HOA dues are $400 per month. This same buyer would qualify for a $400,000 single family residence. $400 in HOA dues translate to about $80,000 more single family residence purchasing power, when rates are in the 4% range.
*The above rate quote has the following assumptions: $400,000 Loan Amount; 20% down payment; credit score above 740; property is SFR; borrower has sufficient income to qualify; APR is approximately 0.20% higher than quoted rate for a $400,000 loan. Estimated closing costs affecting the APR include $4,595 for Origination and Processing Fees, $850 for other Lender Fees; $1,400 for Escrow Fees, and $1,000 for Prepaid Interest.
Call Jay Voorhees or Heejin Kim at (925) 855-4491
Real Estate Broker, CA Bureau of Real Estate, BRE# 01524255, NMLS# 335646