New home loan programs that will save you $1000s
Is one of your goals to buy a home in the next 12 months? Then this episode is for you. Today I interview Dino Katsiametis from CA Coastal Loans and we discuss a bunch of different topics including ways buyers can reduce the interest rate by up to 3% on their next mortgage as well as a brand new program he is rolling out starting today that will help a lot of buyers with a portion of the closing costs/downpayment on their next home. Want to know if you qualify? Watch the episode to find out now!
Want to find out more? You can contact him at:
Dino Katsiametis
dino@cacoastalloans.com
https://www.cacoastalloans.com
949.720.1616
BRE#: 01244052
Thinking of buying a home, want to know the process and costs involved? CLICK HERE
For those of you that would rather read through the conversation you can find the transcript below:
Josh Alexander
is one of your goals to purchase a home in the next 12 months and do you want to save 1000s of dollars when you do so well then today's episode is one that you're not going to want to miss. So in today's episode, I'm interviewing Dino from California Coastal loans. And we're going over a wide variety of topics, including a bunch of different programs that he has to get you rates up to 3% lower than what the current rates are going for saving you hundreds of dollars every single month on your mortgage, we also discuss what to expect over the next couple of months, and what he predicts over the next six months to happen in the industry. And then finally, you're not going to want to miss this. If you're trying to buy a home, he's rolling out a brand new program, it's going to be giving $2,500 to a bunch of different buyers. And this is not just for first time homebuyers, a large chunk of buyers are going to qualify for this. So to get all the details about that, make sure you stay tuned. So let's go ahead and get into today's episode.
Josh Alexander
Everybody, I want to go ahead and welcome Dino back to the show. It's been a while since you've been on but I wanted to bring you back today because one of the biggest challenges we're seeing in today's market is interest rates. So interest rates are making home purchases extremely unaffordable for a lot of people they've gone up by basically doubled since the beginning of the year. So today do you know I brought you on just to kind of talk about some of the solutions out there that buyers can use to be able to still get into a home, make it affordable, make it so they can afford those monthly payments, and just kind of let buyers know what options are out there for them. So again, welcome to the show. And thanks for joining me today. And so let's go on go on into some of those.
Dino Katsiametis
Thanks, again, for having me on here. And, you know, it is like you said rates have actually more than doubled. Yeah, it's gotten really insane out there for a lot of people. I will say a couple things, though, that, you know, the banks are trying to come up with some options here for people, at least some temporary solutions to try and keep getting people in, which I think is a super positive sign. And, and I did hear I was listening to a friend of mine today who created a video and he was talking about how the expectation of what real estate is going to do next year, you know, the numbers that CoreLogic puts out and Blacknight and some of these companies that do the forecasting, I didn't. And he was saying, you know, you're gonna get a 30% return on your money, just based on you know, what, what these companies are putting out. So, and I love this little saying he said, don't wait to buy real estate, buy real estate and wait. Because history tells us you will absolutely always make money. The only time you will ever lose in real estate is if you have to sell during a downside. And this isn't even close to a downside.
Josh Alexander
Yeah, exactly. And that's one of the things that I make sure I'm talking about with anybody it's purchasing a home right now is that if you're planning on staying in the house for five plus years, I mean, it's not really a matter of when you should buy, it's if you can buy if you can afford the payments, it makes sense to get into a place the neighborhood, you want to be in the type of house, maybe you have to do a few more updates that you wanted to do. But if you can get into a place, you're going to be there for the long term. It's going to make financial sense for the long run. Because yes, like you said, the housing market has always appreciated. And over the long term, it's always been a great investment for any homeowners
Dino Katsiametis
below they and you know, we have this mass exodus out of California, it seems like right. If you if you move out of California, do it because you want to not because you're being forced to because you can't afford to buy a home here. So the faster you get in the better, because they're only going to go up from here.
Josh Alexander
Yep, I agree. Okay, so bass talking about that. So in terms of I know, there's a couple different things that we've talked about off screen. But can we go over some of the things that you have available for people that are trying to purchase homes right now and some of the products that you're offering, and try to get the people into homes make it affordable for them to be able to get into the home in the next couple of months? All the way up to maybe the next year?
Dino Katsiametis
Yeah, for sure. If you don't mind, let me share my screen here. Absolutely. So the new hot like you know ticket in town right now as these buy down this up by down calculators, that's a buy down thing and this particular product that I have, it has several different ones. It's got a one Oh, so I'm gonna show you how it works. Let's just say for example, we have a loan amount of $600,000. And let's just say to keep numbers easy, the going interest rate is 7%. Your monthly payment is 3992 principal and interest that doesn't include taxes and insurance. And then so first option we're going to have is the one oh by down if that note rate is 7%. You get a 6% interest rate for the first 12 months, which is a monthly savings of $395 annualized for $4,734. So if you want to take this The cost to get this is the same amount that you're going to save by having a lower rate. So it's not like you're benefiting in any way. You're just basically paying it upfront, in order to save it per month. Now, here's the catch, you can't pay this yourself, and quite honestly doesn't make any sense for somebody to use their own money to do this, if you have the extra money, then, you know, just put it aside and every month take out the extra 395 to help, you know, to help lower your payment. Right? Exactly, yes, it's all meant to be for the seller of the home to pay for you. So a 1% rate reduction for one year is going to cost 4700 bucks, a one one buy down is 6% for the first 12 months 6% For the next 12 months for so a total of 24 months, that savings and cost 9004 68. Now here's where it starts getting a little bit better. There's a two one buy down. And simple, same numbers 2%, lower than the original note rate of 7%. For the first 12 months 6% For the following 12 months. Now let's go to this bottom line three to one, this is where it kind of gets good, you know, because it's a 4%, right? 3% lower than the original note rate of 7%. So you're gonna save $1,127 every single month for the first 12 months, the following 12 months, you're going to save $771. And finally, in the third 12 months, you're going to the third year of it, you're going to save $395 for a total of 27,000 bucks. Now, I know that it seems like a lot. But right now, depending on what price home you're trying to buy, if you could, I know there's a lot of deals to be had. So I think it's quite possible now for a seller to pay this for you. And the way that would work is right, you know, you pay a little bit more for the house, or maybe what they're asking for. But then instead of dealing a reduction of cost for the house at $27,000, you'll say I'll pay your fee, I'll pay your asking price. But I need you to pay my $27,000 in fees. Yeah. And if you do that, if you think about it for the first 12 months, you're gonna be saving 1127. That's an awful lot of money. And it'll put you in a pretty good situation where you can kind of ride out the storm, quite honestly, my opinion is, at some point next year, everybody will be refinancing anyway. But if for whatever reason that's prolonged another year, well, you get another 12 months with a $771 savings per month. Right? So so there's a lot of options here for you. I mean, we got a 1011 and 21321. Right, there's there's a lot of options here. And if we look right here on, you know what the eligibility is, it's for conventional and VA loans. And for FHA loans. Now, there's a catch, right on the conventional and VA, you got to have a minimum credit score of 660. Okay, on an FHA same thing on the credit score 660. However, on the FHA loan, you don't get the three to one buy down option, the max rate reduction is 2%. So all of these will count on an FHA, but not on a three to one. So that's the only caveat there.
Josh Alexander
Okay. And then for those of you listening on podcast, this is definitely an episode you're going to want to check out on either my YouTube on Instagram or my Facebook channel. So you can see all these numbers and all the breakdowns on there. And for those of you that might be thinking, okay, really is a seller going to pay 25 grand basically, to get me into this product? Well, the market has definitely shifted right now. So the last buyer, I hoped, I mean, this is almost becoming commonplace at this point for sellers to pay something for some type of bite down. So it's just a matter of how much they're willing to pay at this point. And like Dino said, and we had this I had this happen on my last sale for representing the seller is the buyer pays slightly over the asking price kind of at the top end of the value of the home. But in return, then the buyer is able to get a credit to be able to use these buy down products to make their mortgage rate affordable so they can actually get into the home. So it's kind of a give and take from both the buyer and the seller. And that's really something like I said with the way that market is going right now is pretty much common place where the sellers are almost at this point expected to give something to help the buyers out because the demand has gone down. So significantly since we're hitting those 7% interest rates, so we've got a bunch of those products. So in terms of the I know you were talking about another product that you were helping with, like, first time homebuyers, and teachers and that kind of stuff as well. So do you want to talk a little bit about that program that you're offering specifically? Yeah.
Dino Katsiametis
And, you know, I'll start a little bit with with the why. You know, I get a lot of people that asked me about the downpayment assistance programs and first time homebuyer programs and all these different things. And yeah, and the reality is, you know, for the most part, right, we're located in Orange County, so the majority of our transactions are in Orange County, or the surrounding areas, right, San Diego, Los Angeles, Riverside. And, and guys, one way or another, I hate saying it. But the cost of a home is so high in these these general areas than any of these government sponsored programs just don't work. They they have all these little restrictions, right? Like, you can only make a certain amount of money in order to qualify for the program. So let's say you do, let's say you make 60 grand, right, you qualify for the program. But guess what, you won't qualify for the home. So it's impossible to do that the last time I did one of these was back after the 2008 crash when when the cost of homes actually were really cheap, then we could do it, and it was working. So with that said, I've decided to roll something out. It's the first time I'm announcing it, actually. So I'm really excited about it, because it's our way of trying to help everybody. And what I'm doing is I'm offering just a $2,500 credit, it's a lender credit, I call it a grant, it's free money, the advantages, you don't have to pay it back. And and you know, pretty, I'm going to make it so pretty much everybody qualifies for it. So here's here's who it is. first time homebuyers will qualify for just automatic 2500 bucks. Anybody that is a teacher or works in the schooling system, anybody who works in the police system, anybody who works in the fire system, anybody that works for a nonprofit organization, including churches, so anybody that works in churches, any military, gosh, today, leave anybody out anybody in the healthcare industry, right that anybody there, apply for a $2,500 just lender credit right off the top. So let's just say all your fees are five grand 2500 bucks will be applied as a credit, which means you'll only have to bring in $2,500. And that's my way right now, I'm trying to help everybody, because I know it has gotten so ridiculously expensive out there. So let's just see if we can get people in the houses because ultimately, that's you know, that's what we do. And we want to make sure we are able to help as many people as possible. You know, the the first time homebuyer is really the person I'm trying to help the most. But then I started thinking about I'm like, gosh, you know, any anybody that kind of puts their neck out on the line, like cops and firemen, right, so and then military is the other one. So let me let me add them. And then I started thinking about I'm like, well, teachers don't really get paid that much money. And they do a lot of good work out there. Right. So so let's just include all these people. Yeah, given 2500 bucks.
Josh Alexander
Perfect. Well, I mean, that sounds like a great program, obviously, like you said, it's going to help a lot of people and save some money on there. Because right now, one of the big things that I that I try to convey to buyers right now is that over the next six months, you're going to have some great opportunities to purchase homes, because the competition is a lot lower. So you're able to get into these homes, often for less than market value right now. Because sellers, especially as we're going into the holiday season right now, they're trying to debate should I keep my house on the market? I really don't want to have my house on the market. Well, I'm trying to have Thanksgiving, or I'm trying to entertain for the holidays. So they're at that point right now where they're saying, Okay, well am I going to accept something, get it sold, be done with it before the holidays, or am I going to take it off the market. So this is one of the best times and I've seen a bunch of articles recently as well like realtor.com. That is saying that October is one of the best times to purchase homes because you have sellers that are really in need of selling their house and want to get it sold still on are more likely to make a deal with you. So if you're looking to purchase a home, the biggest thing really you need to be looking at and this is pretty much always the case. And this goes back to the longer you hold the house, the better of an investment is going to be for you is that you really need be looking at those monthly mortgage payments if you can afford those monthly mortgage payments, and you're going to stay in the house for the long term. There are some great deals to be had. You have a lot of negotiating power right now. You don't have to remove all those contingencies like you've had to do over the last two years. You can take your time, inspect the property, asked for repairs, and you can go through this process and get a much better deal. And it's a lot less stressful for the buying side, because you're not having to see a home hit the market, check it out in an hour. If not, you've got five offers on it. And it's already 50 grand above asking price, we're no longer in that market. So even though yes, homes are definitely more unaffordable right now, especially because of interest rates, if you're able to afford it right now is a great time to be able to look, purchase a home, get a great price, make sure that you secure through the whole transaction, and really have a lot more leverage in negotiating power than you've ever had before.
Dino Katsiametis
You know, if I can add something to that one, one thing, too, that, you know, you got to think about is everybody Natcher, right, because they're afraid of the prices going down and all that there's, there's a lot of talk of that. But there's the doomsday there's, and that's just kind of what they feed off of all the time. And I don't really understand it, because that's just how they are right? They always think the worst of something, if you just look at the statistics, we have a shortage of homes, and we have an abundance of people. That means we have a supply and demand issue. We've had that for a long time, which is what's caused a lot of the problem. And then coupled with the low interest rates, that was a problem, right, that that caused this kind of, you know, excessive craziness that went on. But the fact of the matter is, you know, what's happening right now is is not even a normal market, it's still considered a good market. You know, it's just not stupid, good, like it was for so long, but it's still considered a good market, and we still have a shortage of homes, in which case, we're gonna still have when the house is priced, right. And, you know, it's in a good area and all that stuff, there's still a demand in there still a, you know, multiple buyer type of situation, people bidding on it. I mean, the last deal we put into escrow, there was more than 10 offers, and people over bid on it, because it was a good home, that was price strike. So, you know, when you when people see Oh, prices are dropping, prices rise, that's because some knucklehead priced it at way over what it's worth, right. So of course, it's gonna drop, it's not worth that. And that's where the markets shifted a little bit. But we're not, we're not even in a normal market. I mean, it's still considered good. So even if it drops a little bit more, it's just normal. Like, that's normal, it's normal for it to take longer than five days to sell a house. It's normal for all these things. So for all you guys listening, remember, supply and demand is still an issue. And and the statistics prove that there's still going to be X amount of people coming into market regularly for the next several years, you don't have enough housing to supply that. So get in because you can lock in the price that you bought the home for. Now, I know the interest rate is high right now. And that scares you. But remember, the interest rates will change. And from all the expectations at some point next year, interest rates are due to drop. And I think they're gonna drop easily into the fours. We'll see if we get into the threes or not. But I mean, you know, lock it in. Because once that happens, guess what's going to happen to the real estate market again?
Josh Alexander
Yeah, it's just too slow. Yep. Yeah, the underlying supply and demand fundamentals are there and like you said, I kind of talked about the the millennial generation right now as one of the biggest drivers of the housing market representing almost 50% of all transactions in the United States last year, they're entering those peak years for purchasing homes now, all the way for the next two or three years. On top of that there's a lack of homes have been being built. Builders have been under building since 2008, every single year, so there's just not enough homes out there. So really, the interest rates are really causing the fluctuations in the market. We had unhealthy interest rates going too low, which caused prices to spike. And now we have interest rates going the other way. But the underlying fundamentals are there. There's a lot of demand in the marketplace right now. And it's not going to be going away. So like you said, you know, you need to make sure that if you want to get into a home right now, and you can afford those payments, like Like we've been talking about, that's kind of the biggest thing you have to make sure that financially you can do it. So you don't want to be over stressing yourself. And luckily right now, I mean, because of everything that happened with 2008 lenders like yourself, you have very strict guidelines that you have to follow. So you know, people when they're doing these buy down rates, this is not an arm product where you have adjustable rates, you know, every single year what your payments are going to be, you know what the max payment is going to be and you're getting qualified on that Max payments. So if these aren't things products that you're seeing out, like you saw before 2008 happen. This is something that you know that you can qualify to be able to afford and as long as you're comfortable with those Max payments, obviously you don't want to be good And yourself in saying that I know interest rates are going to drop. Yes, it's very likely, because history has shown for 50 years, every time inflation starts going down, which is expected over the next 12 months, at some point that you can see interest rates are going to follow after that. So I completely agree at some point in the next 12 months, you should see interest rates start to go back down. And at that point, like you said, as well, then you're getting back to the housing market where you're going to have the demand there, it's going to come back people been sitting on the sidelines, and you're going to be into the same type of situation. You've been over the last two years as a buyer trying to compete for homes trying to have to over bid for homes, because the reality is we just don't have enough homes in California right now. And that's not going to change anytime in the next couple of years. That's going to be something that's going to take a decade or two. If we do it right to get that under control. And even then it's going to be very difficult to do.
Dino Katsiametis
Absolutely. And like you said, That's why take advantage of some of these new programs that are out by you know, having the seller buy down your interest rate by two or 3%. Yeah, I mean, can't get better than that. Yeah. And then when you refinance, you'll be there you know, permanently.
Josh Alexander
Exactly. Yep. Perfect. Well, I think that pretty much wraps up everything I wanted to talk about with you today. Do you know again, I know, there's a lot of headlines out there right now scaring people in terms of what the housing market is going to do. So I like to to provide as many different viewpoints as possible and get some clarity on what's actually happening, using data statistics and looking at all the different ways that you can still afford to get into a house right now, even though interest rates are higher. So hopefully, for those that are watching today, you got some great information from this. If you did find it useful, please hit that like and subscribe button. If you know anybody that might find this information useful. For instance, any of those people that Dino mentioned, that can qualify for that buyer grant of $2,500 Make sure you share it with them as well, because that's $2,500 for free that they get when they purchase a new home. So hope again that you found today's information useful until next week episode. Stay happy, stay healthy, and I'll see you on the next show.
