Should I Cash In on My Home Equity and Refinance My Current Mortgage Loan Before the Bubble Bursts?
By Nick Rian
A report in the Los Angeles Times shows, "When the price of houses in California soared 17 percent in 2003 and 22 percent in 2004, a curious thing happened: Instead of homeownership decreasing because fewer people could afford houses, it rose to record levels."
Basically, homeowners in California are more inclined to use interest only loans to purchase more home than they can actually afford and the game gets dangerous, when FMV (fair market value) starts to drop. "Abundant foreclosures could spark a downturn in the entire housing market, leading to the long-feared bursting of what some call a housing bubble," shows Streitfeld's LA Times article.
Basically, homeowners in California are more inclined to use interest only loans to purchase more home than they can actually afford and the game gets dangerous, when fair market value begins to decline. "Abundant foreclosures could spark a downturn in the entire housing market, leading to the long-feared bursting of what some call a housing bubble." An article in the San Diego Union Tribune, shows higher interest rates stopping prospective home buyers from signing on the bottom line. Those trends are forcing home owners to drop their prices. The Federal Reserve shows, homes' appraised value made up 145% of nominal gross domestic product in March, while stocks and mutual funds were worth 82% of the Gross Domestic Product.
"The plan is for the feds to keep raising rates until inflation comes down.' says mortgage broker Mike Johnson. "Expect higher interest rates for refinancing and home equity loans through 2006."
California Home Equity and Mortgage Rate Info by City
San Diego Home Interest Rates
Home values are up in some areas of San Diego County, while certain areas in both North and South County are starting to report a decline in home sales. Lock into a fixed rate home mortgage before the interest rates rise.
Orange County Home Loans
O.C. Job growth helped keep property values high for years, but home sales from San Clemente to Newport seem to have leveled off. Home sales in Tustin, Santa Ana and Mission Viejo may have actually dipped.
San Diego Home Loans
San Diego County has seen two to five-million dollar homes become common along the coast.
Los Angeles Home Loans
LA home values reached highs in 2005 and have began to slowly decline except in the beach cities like Manhattan and Hermosa Beach.
Riverside Home Loans
Corona and Riverside home prices are declining a bit in 2006.
South Orange County Mortgage Rates
Coastal properties in Laguna Beach, Dana Point and San Clemente, show a slight decrease for property values in 2006. The time to refinance your adjustable rate mortgage for a fixed rate is now!