So higher rates are a thing...

[AJ Wong]

Just a quick update to all my fellow short term, multi unit or property investors in general..

I've been working closely with both investor specific mortgage brokers and local credit unions on in house portfolio loans for pre-qualifications of several purchase clients. 

With 800+ credit, second home, full documentation, 20-25% down for either a conventional $550K PP or Jumbo $2M PP the quoted rate on a conventional 30 year mortgage was 7.875% & 10.25% respectively! 

There are more creative options available in this stratosphere at or around 6.5% but just an illustration of how historic the acceleration and deterioration of readily available cheap credit has occurred. I'd imagine in January 22 the rate was closer to 5.5%..

I anticipate a complete stall of the luxury real estate market except for those transactions needing or wanting to transfer or liquidate assets and can afford cash purchases at much more reasonable price points. Entry level first time home buyers and conventional affordable rental properties will continue to see demand albeit with considerably less purchase competition and activity.  

We are firmly in the first innings of a transition to a buyer's market and the rebalancing of asset valuations. 

Highly suggest a real estate professional with background and experience in seller financing and other creative financing solutions..for example how does 25% down at 5% interest only for 5 years sound? $375K PP Closed 10/12/22...

Thoughts on this?

If anyone has any lender specific programs for jumbo/super jumbo or second home purchases, you're up...

[Raymond J. Rodrigues]

@AJ Wong

For $550k PP putting 25% down, I see 7% for a second home. 

With 20% down, 7.375%. 

For $2M PP with 20% down, I am seeing 8%.

For $2M PP with 25% down, I am seeing 6.5%.